BJ's Restaurants Inc. Message Board

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Non-Tech : BJ's Restaurants Inc.

BJRI 34.95

+0.7%

Nov 7 9:30 AM EST

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To: Wowzer who wrote (371)	2/28/1999 9:06:00 PM
From: Robert T. Quasius	Read Replies (1) of 865

Here's an interesting post from the Yahoo board. It sounds like it was written by an insider: Back in January when LPL made its inadequate offer to buy CHGO many of the shareholders on this board were "insulted" and came out strongly against it. If you remember correctly one of the terms of the deal would have given CHGO mgmt.special treatment including a higher price for their shares as well as to remain with the company in their current capacities. Many expressed concern that perhaps they would accept that deal and we would all lose out on the potential of this company. The CHGO board met and promptly declined the offer to our collective accolades. Surely one can conclude that this was not the action of a selfish management team. Now a little background on Assi/Mr. Habasch. When CHGO went public he paid $5.50 for his 1.2M share stake. Despite whether or not you agree with his religious objections to gambling, he took a loss of over $3.5 million dollars on the shares alone when he sold out in the $1.75 range (not to mention the 3.2M warrants he has agreed to cancel which he probably paid over a $1 each for as part of the new deal). In this new deal if you simply focus on the exchange of shares for cash (which many have done incorrectly) Assi's new shares are valued at .80. If he turned around and sold that many shares tommorrow and managed to get a $1.50, he'd make a profit of less than $850,000. Do you really think that Assi would make another investment of $1M after the enormous loss he took on his original holdings simply to make back less than 25% of it. Assi believes in CHGO and is willing to put aside his (obvious strong)objections to video poker to continue his relationship with CHGO in a now even more supportive manner. I called Mr. Motenko and spoke with him about this new deal. One of the questions he has consistently been asked by shareholders is if the warrants would be addressed in the future so as to prevent dilution in the future as well as holding back the stock price currently. Many of us have stated that we are waarant holders also because we expect CHGO to reach $5.50 by 2002. If that is true why are so many stating that these warrants are suddenly not valuable anymore. This deal terminates over 25% of outstanding warrants immediately! STOP LEAVING OUT THE FOLLOWING IN YOUR ASSESSMENTS OF THE DEAL: Assi will also provide financing of future projects for CHGO. This is huge for the company. Companies the size of CHGO just don't get access to capital like this. CHGO has declined some proposed sites of Assi's in the past. Now CHGO will be able to propose sites to Assi and receive his support. Cash flow from ops has been satisfactory to finance their expansion and would have continued to be without this deal. With this deal, the $1M will give CHGO additional flexibility to be even more aggressive. The termination of the consulting agreement for the Northwest restaurants would have paid out 5% of their net income for the next two years. As the company continues to make progress in reducing expense this will also improve CHGO's results. I equate Assi and Mr. Habasch as CHGO's rich uncle that we are fortunate to have. Like us, he believes in the potential of CHGO and continues to put his money where his mouth is. Mr. Motenko is very proud of the deal and welcomes your calls if you have concerns. Instead of making accusations why not call him like I did at (949)367-8616. Remeber this: Last month CHGO management were heroes for declining this $2 offer. Mgmt. contracts with CHGO allows for the officers to make out quite well in the event of a change of control. If LPL is successful at some point in taking over the company for a measely $2/share, CHGO officers will receive a windfall anyway and we will receive a small return on our investments (if we bought in at the 1 3/4 range) on a company we believed had far more potential. In my opinion, by keeping CHGO public, this deal will simply allow all of us to share in the rewards of their efforts. Now tell me what is selfish about that?

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