) recently announced that it is being acquired by a private equity
group Angelo, Gordon & Co.'s in a merger deal valued at around
$296 million or $16.30 per share in cash. Execution of the deal
will make Benihana private.
The offer price is at a 46% premium to the average closing share
price for the 30-day period ended March 13, 2012 and at around 23%
premium to the closing share price on May 21. On March 13,
Benihana declared the evaluation of strategic alternatives which
included a possible sale, in association with Jefferies & Co.,
in order to bolster shareholder value.
However, the completion of the deal is subject to regulatory as
well as shareholders' approvals and other customary closing
conditions. Moreover, there will be a 40-day period where Benihana
can consider if it gets any lucrative offer from any third party,
running through July 1, 2012. The possibility of a higher bid
however seems negligible as Benihana has been offered an attractive
Although Benihana's growth in comps gained momentum in recent
times, in its third-quarter 2012 results, Benihana's earnings per
share fell short of both the Zacks Consensus Estimates and the
year-ago level. Benihana management appears to be content with the
offered cash premium as it believes Angelo has justified the value
of the Benihana brand.
This is not the first time that Benihana tried to sell itself.
Earlier, in July 2010, Benihana had considered the possible sale
option under its strategic alternatives review program. This
leading Asian themed Japanese steak-and-sushi eatery, operates 95
units spread across three concepts namely Benihana restaurants,
Haru sushi restaurants and RA Sushi restaurants. The distinctive
concept as well as growing demand for quality Japanese dining made
it a lucrative acquisition target.
If executed, we believe that after the deal Benihana will be
handled well by its new owner Angelo Gordon's Private Equity Group.
The group makes sizable investments in the range of $50-$500
million in sectors like financial services, consumer/retail, and
In the recent times, merger and acquisition activity has gained
momentum in the sector. The companies are looking at potential
business partners to unlock value. Benihana is not the only
restaurant to go private. One of its competitors
P.F. Chang's China Bistro Inc.
) also recently agreed to be bought for $1.1 billion by
Centerbridge Partners LP.
BENIHANA INC (BNHN): Free Stock Analysis Report
PF CHANGS CHINA (PFCB): Free Stock Analysis
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