Thomas H. Lee Partners, a Boston firm also responsible for the purchases of Dunkin’ Brands Inc. back in 2006 has inked a deal with CKE Restaurants Inc. to assume roughly $309 million in debt from CKE. CKE shareholders will receive $11.05 in cash for each share belonging to them, a noted 24 percent premium to its closing price this past Thursday of $8.91. What does all this mean for Carl’s Jr. and Hardee’s?
CKE restaurants CEO Andrew F. Puzder assured in a statement that this acquisition was a correct choice due to THL’s experience in the consumer sector. Obviously notable is the sluggish economy of recent memory, and in particular, Carl’s Jr. and Hardee’s major decisions to not offer a significantly discounted menu of items like its competitors in the form of “Dollar Value Menu”‘s and the like, all in the hopes of retaining brand image and integrity in a time where cheapened fast food is at an all time high.
According to Yahoo!, sales at Carl’s Jr. restaurants fell 5.2 percent last year, and Hardee’s saw a 1.8 percent fall the last 3 months preceding Nov. 2. Their stock prices have also been notably volatile, being traded at $5.65 to $11.52 in the past year. It will only be a matter of time before it becomes apparent whether this was a more beneficial purchase by THL Partners in a time where Burgers may be a good investment regardless of a down economy, a good decision on behalf of CKE to protect its brand in the longrun, or a plethora of other outcome possibilities.
We’ll update as more information comes our way!
UPDATES: We’re hearing different #’s in regards to the selling price. We provide our sources to all information we use in our postings, so we’ll keep you up to speed on where our information is coming from and its legitimacy.