NEW YORK ( TheStreet) -- After placing orders for P.F. Chang's China Bistro (PFCB) and Morton's (MRT), private equity is returning to the dinner table through Angelo, Gordon & Co's $16.30 a share buyout of Benihana (BNHN).
For Angelo, Gordon & Co., the $296 million bet on Benihana comes after previous attempts by the restaurant chain to find an acquirer failed, and at an over-20% premium to Benihana's Monday close.
|A private equity take out of P.F. Chang's may be just what the restaurant chain needs to change its fortunes.|
In March, Miami-based Benihana said it had hired Jefferies (JEFF) to seek bids for the company after a similar process in 2010 ended without a credible buyout offer. Since then, Benihana has returned to profitability and its stock has nearly doubled. Tuesday's buyout offer is a bet on a continued turnaround at the company's specialty Japanese restaurants after a near death experience during the recession.
Amid a string of loss making years during the recession, Benihana shares tumbled below $2, prompting it to eventually consider strategic alternatives such as an outright sale. However, after launching a sale process in July 2010 at the beckoning of shareholders, the company was unable to negotiate a deal for its 95 restaurants nationwide that include 62 Benihana-branded restaurants, eight Haru sushi restaurants and 25 RA Sushi restaurants. The company also has 16 franchised restaurants.Tuesday's deal was struck at a 46% percent premium to its 30-day average closing share price on March 13, 2012, when the restaurant chain announced the hiring of Jefferies. Bloomberg estimated that a Benihana buyout would be the most expensive restaurant buyout since 2007, when Sun Capital bought Friendly Ice Cream Corp. Under the terms of the agreement, Benihana and its advisor Jefferies will actively solicit competing bids from third parties in the next 40 calendar days continuing through July 1. In Tuesday trading Benihana rose over 21% to $16.16, its highest level in roughly five years. That share surge was still below Angelo, Gordon & Co's offer price, though, signaling lukewarm expectations off a higher bidder in the coming month.