Santa Barbara, California-based CKE Restaurants Inc. has signed a letter of intent to buy out the Santa Barbara Restaurant Group, a deal it hopes to close by the end of March next year.
The agreed deal, which is still subject to due diligence, regulatory approvals and votes by both companies’ shareholders, will involve a stock transaction that will convert every Santa Barbara share into a half a CKE common share.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
The completion of the transaction also depends heavily on the average price of CKE common shares during the ten-day trading period running until the penultimate business day prior to the acquisition. Santa Barbara is able to back out of the deal if that average price is less than US$6.25. On the other hand, if the average price rises above US$9.5, CKE will be able to call off the deal.
Based on CKE’s stock price yesterday, the company said that the deal is valued at about US$62m.
