J. Alexander’s Corporation (NASDAQ: JAX), today announced that on Friday, June 22, the Company entered into an agreement with Fidelity National Financial, Inc. (NYSE: FNF) to merge the Company with a subsidiary of American Blue Ribbon Holdings, Inc. (“ABRH”), a newly formed, indirect majority owned subsidiary of FNF. Immediately following the merger, J. Alexander’s will be combined with the current restaurant operations of ABRH, LLC, a restaurant operating company and an indirect majority owned subsidiary of FNF. Following the transaction, the combined restaurant operating company will own and operate over 700 restaurants in 43 states under seven different restaurant concepts with total combined annual revenue of approximately $1.5 billion.
The shareholders of J. Alexander’s Corporation may elect to receive per share $12 in cash or a combination of $3 cash and one share of ABRH Class A common stock, subject to proration at closing so that shareholders of the Company will receive a total of 49.9% of the shares in ABRH. Following the transactions, existing shareholders of the Company receiving shares will own in total a 6% economic interest in the combined restaurant operations, including J. Alexander’s. An approximate total of 2.99 million Class A common shares in ABRH will be issued to shareholders of the Company receiving the cash and stock election. When issued, these shares will be listed for trading on Nasdaq, or an equivalent national securities exchange. The remaining economic interests will be owned by FNF and other minority investors. Following the transaction, FNF will hold a special class of common stock in ABRH that will entitle FNF to at least 50.1% of the voting power of ABRH so long as FNF retains at least a 40% economic interest in the combined restaurant operations.
Lonnie J. Stout II, Chairman, President and Chief Executive Officer of J. Alexander’s Corporation, said that shareholders will vote on the proposed merger at a shareholders meeting to be held as soon as practicable.
“We believe this transaction will provide significant benefits for our shareholders,” Stout said. “It not only rewards them with a cash premium for their existing shares, it offers them participation in the future business prospects of a much larger entity. We think that FNF’s track record, experience and commitment to creating shareholder value will be a great benefit for our shareholders going forward.”
Commenting on the announcement, FNF Chairman William P. Foley II, said, “J. Alexander’s provides the upscale casual restaurant guest with a high quality dining experience and outstanding professional service. We are proud to add J. Alexander’s to American Blue Ribbon Holdings’ existing restaurant concepts.”
In addition to approval by J. Alexander’s Corporation shareholders, the consummation of the transactions is subject to conditions, including clearance under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976, the listing of the Class A common stock to be issued to shareholders of the Company on Nasdaq or an equivalent national securities exchange, and other customary closing conditions. The transaction is targeted to close in the fourth quarter of 2012, assuming satisfaction of the conditions to closing.
Under the terms of the agreement, J. Alexander’s Corporation may solicit superior proposals from third parties during the 30 calendar days following execution of the agreement continuing through July 22, 2012. There can be no assurance that this process will result in a superior proposal, and the Company presently does not intend to discuss any developments with regard to this process unless the Company’s Board of Directors makes a decision with respect to a potential superior proposal. Cary Street Partners LLC is acting as financial adviser to J. Alexander’s.
FNF, based in Jacksonville, Florida, is a leading FORTUNE 500 company with subsidiaries engaged in title insurance, mortgage services, restaurants and other diversified services. FNF presently owns approximately 55% of ABRH, LLC, whose restaurant operating concepts include Bakers Square, Max & Erma’s, Village Inn, Stoney River Legendary Steaks, O’Charley’s and Ninety Nine, as well as the APC award winning pie bakery Legendary Baking.
J. Alexander’s Corporation operates 33 J. Alexander’s restaurants in 13 states: Alabama, Arizona, Colorado, Florida, Georgia, Illinois, Kansas, Kentucky, Louisiana, Michigan, Ohio, Tennessee and Texas. J. Alexander’s is an upscale, contemporary American restaurant known for its wood-fired cuisine. The Company’s menu features a wide selection of American classics, including steaks, prime rib of beef and fresh seafood, as well as a large assortment of interesting salads, sandwiches and desserts. J. Alexander’s also has a full-service bar that features an outstanding selection of wines by the glass and bottle.
J. Alexander’s Corporation is headquartered in Nashville, Tennessee.