Applebee’s International Inc.’s move to settle a proxy battle leaves it free to continue exploring ways of boosting shareholder value, including evaluating preliminary offers from would-be acquirers.
The Overland Park-based restaurant chain announced April 26 that it had reached a settlement in a proxy battle with activist investor Breeden Partners LP. The deal expanded Applebee’s board by adding two seats for Breeden Partners representatives. In return, Breeden Partners dropped its effort to elect a rival slate of four directors.
On the same day, Applebee’s said its strategic alternatives committee was evaluating several preliminary buyout offers and a possible recapitalization, as well as ways to control costs and strategies for improving same-store sales. Taking a page from the Domino’s Pizza Inc. playbook, Applebee’s also has been investigating securitizing its royalty income and other assets. Last month, the pizza chain completed a deal that used a $1.85 billion securitized debt facility to fund a special dividend of $13.50 a share.
Applebee’s could borrow against its future cash flow to pay a similar dividend or to finance a purchase of the company.
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