NPC International, Inc. (Nasdaq:NPCI), yesterday announced that it has received an offer from O. Gene Bicknell, Chairman, CEO and majority stockholder, to acquire the Company through a cash merger for $11.40 per share.
This offer represents a 10% premium over the Company’s closing stock price today of $10.375 per share, and a 31% premium to the Company’s trading price thirty days prior. The offer is contingent, among other things, upon Mr. Bicknell’s ability to obtain financing on acceptable terms. Mr. Bicknell currently owns approximately 65% of the Company’s shares outstanding and intends to retain all of his shares. Mr. Bicknell has further indicated that he has no interest in selling his controlling ownership position to a third party. Mr. Bicknell is being advised by Banc of America Securities LLC.
In explaining the factors prompting his offer, Mr. Bicknell said: “Based upon follow-up discussions with Tricon regarding its recent decision to moderate its refranchising activities, it is now apparent that these decisions will significantly impair our ability to meet our acquisition goal of approximately 150 units during fiscal 2001 as well as future acquisition prospects. While opportunities for franchisee acquisitions remain a growth option for the Company, these opportunities are not as readily available, are less predictable, and are more difficult to execute than our historical participation in Tricon’s refranchising program. The premium I am offering takes into account the significance of Tricon’s recent change in position which I do not believe has been adequately reflected in the current trading price of the Company’s shares.”
Mr. Bicknell further noted: “These facts and circumstances, as well as the operating environment within the competitive pizza segment, creates real doubt as to whether the Company can maintain the growth rate expected of a publicly traded Company. With the help of my advisors I have evaluated the strategic alternatives available to the company and its stockholders in light of these recent developments. Based upon a thorough evaluation of these alternatives, I have concluded that the Company and its stockholders interest would be best served by my acquisition of the minority interest in the Company.”
The Company will form a special committee comprised of independent directors to evaluate the fairness of the offer. It is anticipated that the special committee will select an independent investment banking firm and legal counsel to help them in evaluating and responding to this offer.
NPC International, Inc. is the world’s largest Pizza Hut franchisee and currently operates 839 Pizza Hut restaurants and delivery kitchens in 27 states.
