O’Charley’s Inc. (NASDAQ: CHUX) has signed a definitive agreement with Fidelity National Financial, Inc. (NYSE:FNF) related to FNF’s acquisition of all the outstanding shares of the Company’s common stock for $9.85 per share, representing a total equity value of approximately $221 million on a fully diluted basis. The purchase price represents a premium of approximately 42% to the Company’s closing stock price of $6.92 on February 3, 2012 and a premium of approximately 57% to the 20-day average trading price of $6.27. The transaction was unanimously approved by the boards of directors of both companies.
David W. Head, president and chief executive officer of O’Charley’s Inc., said, “This transaction provides a number of benefits, including, for our shareholders, a substantial and immediate cash value for their shares. We believe FNF’s expertise and commitment to long-term growth will enable O’Charley’s Inc. to complete its turnaround and achieve its growth objectives, benefiting our employees, guests, business partners and other stakeholders.”
FNF Chairman William P. Foley II, added, “We have been seeking an investment in a larger, scalable, strategic restaurant operating company to complement our successful investment in American Blue Ribbons Holdings LLC (“ABRH”). With more than 340 restaurants and over $800 million in revenues, O’Charley’s is an attractive company with three proven restaurant concepts in O’Charley’s, Ninety Nine and Stoney River. There is a real opportunity to continue to improve the operating performance at O’Charley’s and to build on their current momentum. We look forward to having the ABRH and O’Charley’s teams working toward that end. ABRH operates more than 220 company-owned restaurants, 63 franchised restaurants and generates approximately $460 million in annual revenue. We look forward to the successful completion of the tender offer and to welcoming all of the O’Charley’s concepts and employees to the FNF restaurant family.”
Under the terms of the definitive agreement, FNF will commence a tender offer for all the outstanding shares of the Company that FNF does not own no later than February 24, 2012. The closing of the tender offer is conditioned on the tender of a number of O’Charley’s Inc. shares that, together with shares owned by FNF, represents at least a majority of the total number of Company shares outstanding; the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976; and other customary closing conditions. The transaction is not subject to a financing condition. Upon the completion of the tender offer, FNF will acquire all remaining shares of the Company’s stock through a second-step merger that will result in all shares not tendered in the tender offer being converted into the right to receive $9.85 per share in cash, the same consideration per share as paid in the tender offer. The transaction is targeted to close in the second quarter of 2012, assuming execution of the tender process and satisfaction of the conditions to closing.
Under the terms of the definitive agreement, the Company may solicit superior proposals from third parties through March 6, 2012. It is not anticipated that any developments will be disclosed with regard to this process unless the Company’s Board of Directors makes a decision with respect to a potential superior proposal. There are no guarantees that this process will result in a superior proposal.
Evercore Partners is acting as the exclusive financial advisor to the Company, and Bass, Berry & Sims PLC is acting as the Company’s legal advisor.