Tuesday March 25 4:48 PM EST
Rally's Hamburgers Inc Checkers( Checkers Drive-in Restaurants Inc )to merge
LOUISVILLE, Ky., March 25 (Reuter) - Rally's Hamburgers Inc and Checkers Drive-In Restaurants Inc said on Tuesday that they have agreed in principle to a merger.
Under the terms of the letter of intent signed by the parties, each share of Rally's common stock will be converted into three shares of Checkers common stock.
Upon completion of the merger, said the companies, Rally's will become a wholly-owned subsidiary of Checkers.
The merger is subject to a definitive agreements, stockholder approvals and other customary conditions. It is expected to close in the second or third quarter of 1997.
The completion of the merger, said the companies, will result in a combined total of 949 Rally's and Checkers restaurants, including 73 company-operated and 476 franchised restaurants.
For 1996, Rally's and Checkers revenues totaled $162.8 million and $165 million, respectively, and systemwide sales were $16.7 million and $345 million, respectively. It is anticipated that Rally's and Checkers will keep a presence in their respective Louisville and Clearwater offices.
The companies said the merger would result in increased purchasing and distribution power, favorable marketing and media efficiencies and reduced development costs. Additionally, they said general and administrative expenses would be significantly reduced by eliminating certain corporate costs, including duplicate public company expenses and technology costs. |
