Chicago Pizza Gets $2-Shr Cash Buyout Offer From La Pizza Loca
12/15/98 10:53
Chicago Pizza Gets $2-Shr Cash Buyout Offer From La Pizza Loca
Washington, Dec. 15 (Bloomberg) -- La Pizza Loca Inc., a
southern California pizza restaurant chain, offered $2 cash for
each common share of Chicago Pizza & Brewery Inc. that it doesn't
already own and isn't held by top executives of Chicago Pizza.
The offer by Buena Park, California-based La Pizza Loca
would value the operator of BJ's Pizza & Grill restaurants at
$12.8 million -- about 19 percent more than its $10.8 million
market value at its most recent share price of 1 11/16 before
trading was halted earlier today -- based on 6.4 million common
shares outstanding as of Sept. 30.
Alex Meruelo, chief executive and owner of 95 percent of La
Pizza Loca, has bought 474,000 common shares for a 7.4 percent
stake in Mission Viejo, California-based Chicago Pizza since
July, according to his Schedule 13D filing to the U.S. Securities
and Exchange Commission that disclosed the buyout offer.
La Pizza Loca's cash offer excludes Meruelo's shares plus
those held by Paul Motenko, chairman and chief executive, and
Jerry Hennessy, chief operating officer and chief financial
officer, the filing said. The Chicago Pizza executives would
exchange their shares for stock in the surviving company, which
would combine with a unit of La Pizza Loca.
As of April 27, Motenko owned 678,857 shares and Hennessy
owned 658,857, according to Chicago Pizza's most recent proxy
filing. Excluding their shares and Meruelo's stake would leave
about 4.6 million shares to buy, costing $9.2 million at the $2
offer price. The company also had $412,922 of long-term debt
outstanding as of Sept. 30. Assuming that debt would raise the
cost of the purchase to $9.6 million total.
La Pizza Loca would fund the acquisition using $500,000 cash
plus credit-line debt for the rest of the purchase, according to
its SEC filing. The transaction would depend on negotiations of
''mutually acceptable'' terms and voting approval by Chicago
Pizza shareholders.
Chicago Pizza had $26.2 million in 1997 sales and, after
increasing its sales in each of the first three quarters this
year, had $22.9 million of sales through Sept. 30. In the third
quarter it earned $285,000, or 4 cents a share, on sales of $8.2
million. The company operates 27 casual pizza restaurants and
brewpubs in California, Oregon, Washington, Hawaii and Colorado.
The company's shares, which rose 1/8 to 1 11/16 before
trading was halted, have fallen 13 percent over the past six
months.
--John Rega in Washington (202) 624-1907/ge
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