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Strategies & Market Trends : Can you beat 50% per month? -- Ignore unavailable to you. Want to Upgrade?

To: Smiling Bob who wrote (12205)	10/30/2007 7:38:36 PM
From: Smiling Bob	Read Replies (3) \| Respond to of 19256

IHP is a fantastic short When I read how one dump is going to fix another, it leaves you wondering how it hasn't dived already People stopped going there because it's a filthy pit Ihop not much better, though haven't been there in years either --- Applebee's Shareholders Back $1.9B Sale Tuesday October 30, 6:15 pm ET By David Twiddy, AP Business Writer Applebee's Shareholders Vote for $1.9 Billion Sale to IHOP OVERLAND PARK, Kan. (AP) -- Shareholders of the bar-and-grill chain Applebee's International Inc. on Tuesday approved a $1.9 billion buyout offer from pancake house operator IHOP Corp. More than 70 percent of the company's shares voted to approve the agreement, which critics said shortchanged shareholders. Under terms of the deal, shareholders of Overland Park-based Applebee's will be paid $25.50 per share, a 4.6 percent premium over its closing price on the day before the offer was announced. Glendale, Calif.-based IHOP is also assuming $155 million in Applebee's debt as part of the deal. The sale is expected to close by Nov. 29. The combined company would have $6.8 billion in annual sales and more than 3,200 restaurants. Officials at both companies have characterized the deal as a way to help rejuvenate Applebee's, one of the nation's largest restaurant chains. Its profits and sales have fallen in the past year as rising fuel and housing costs and changing consumer behavior have reduced traffic in its dining rooms. The deal is viewed as a coup for IHOP, which is smaller than Applebee's but has had success in building its own brand and sales in the face of economic headwinds. Julia Stewart, IHOP's chief executive officer and a former Applebee's executive, has said she plans to franchise most of Applebee's 510 company-owned stores and sell real estate tied to around 200 of those stores as a way to pay for the deal. "After a successful closing, we look forward to applying the focus and discipline that we have employed at IHOP to successfully restructure and re-energize the Applebee's brand," Stewart said in a news release. "By working in collaboration with the Applebee's associates and franchisees, we believe that the brand can again achieve the success it enjoyed in the past." Applebee's Chairman Lloyd Hill, who joined the company's board in 1989 and became chief operating officer in 1994, stepped down as CEO last year. He had voted against the deal as a member of board of directors and indicated he would vote against it as a shareholder. "This is not the future I had envisioned for Applebee's," a somber Hill said in announcing the results of Tuesday's vote, while adding that he accepted the direction the majority of the company's directors and shareholders had chosen. Hill thanked Applebee's employees and encouraged them to work with IHOP management in improving the company. "I remain confident in the incredible appeal and strength of this great American brand," he said. Started in Atlanta in 1980 and taken public in 1989, Applebee's grew into the nation's largest casual dining chain with 1,955 restaurants in 49 states, one U.S. territory and 17 countries. While a chain, the individual restaurants, scattered in cities big and small, tied themselves to their communities with homey interiors decorated with mementos of local heroes and sports teams. But the economy in recent years put pressure on diners' wallets and the improving quality of fast food companies and so-called fast casual competitors, such as Chipotle and Panera's, as well as Applebee's own inability to distance itself from rivals Chili's Grill & Bar, Friday's and Ruby Tuesday's began cutting into sales. On Monday, Applebee's said its year-to-date sales through September in restaurants open for at least a year were down 1.8 percent. In February, following several months of behind-the-scenes maneuvering and a brief proxy fight with activist shareholder Richard Breeden, the company announced it was considering its strategic options, including a possible sale. IHOP, which rebuilt its image soon after Stewart took over in 2002, was the highest bidder, announcing the acquisition in July. The deal was criticized by several large shareholders who felt the $25.50 share price was too low, especially because Applebee's shareholders would receive no benefit if Stewart's plans to rejuvenate the company succeeded. Shareholder advisory firms and stock analysts were divided on the issue with some recommending approval while others said Applebee's should stay independent and franchise the company-owned stores itself. The debate split the company's board of directors, which voted 9-5 to approve the sale this summer. Among those voting against it were Hill and Chief Executive Officer Dave Goebel, who had pushed a similar refranchising strategy but were outvoted by directors worried the company's shaky finances and the deteriorating credit markets wouldn't handle the strain. Among those voting against the deal was director Burton Sack, a former Applebee's executive and the company's largest individual shareholder. Sack has said he plans to file suit in Delaware Chancery Court once the sale is completed, challenging the $25.50 share price. Shares of Applebee's rose 9 cents to close at $25.29 Tuesday, while shares of IHOP rose 4 cents to end at $62.72.

To: Smiling Bob who wrote (12205)	9/10/2008 8:43:34 AM
From: Smiling Bob	Respond to of 19256

Investors Bruise Applebee's Parent By JANET ADAMY and JOANN S. LUBLIN September 10, 2008; Page B1 By sending DineEquity Inc.'s stock plunging 26% Tuesday, investors racheted up the pressure on the new owner of Applebee's to deliver on its ambitious turnaround plans for the nation's largest sit-down restaurant chain. The selloff came a day after the company announced that Chief Financial Officer Thomas Conforti had resigned, effective immediately. The company, which also owns the IHOP pancake chain, said Mr. Conforti left to "pursue other opportunities." It said it agreed to give the departing executive a year's salary, plus his average annual bonus and a one-year car allowance, among other things. [Investors Bruise Applebee's Parent] Zuma Press DineEquity hopes to sell hundreds of company-owned Applebee's. Mr. Conforti's exit and the subsequent plunge in the stock raise doubts about how successfully DineEquity is digesting one of the biggest restaurant acquisitions in recent years. Last year, the company, then known as IHOP, agreed to buy Applebee's for $2 billion in a complex deal Mr. Conforti helped to engineer. It was considered a bold move because IHOP had about half of the market capitalization of Applebee's, and top executives at Applebee's had claimed the deal was unfair to its shareholders. A key to the deal's success was the new owner's ability to sell hundreds of company-owned Applebee's restaurants to franchisees, one of the ways it planned to pay down the hefty debt it took on to buy the chain. DineEquity plans to refranchise 100 locations by the end of this year and another 190 next year. But, partly because of the continuing credit crunch, it has completed the sale of just 26 locations and entered sale agreements for just 18 more. "This unexpected departure is a negative and adds near-term risk to the story," Steven Rees, an analyst at JPMorgan, told investors in a research note Monday. In an email sent through a spokesperson, DineEquity's chairman and chief executive, Julia Stewart, said Mr. Conforti's resignation "was not the result of any undisclosed financial problem or challenge." She also said "it would be erroneous to conclude that Tom's departure had anything to do with the pace of refranchising or the company's plans to revitalize the Applebee's brand." A person familiar with the situation said Mr. Conforti and Ms. Stewart disagreed about how to build the two chains going forward, in part because of the differences between Applebee's, a bar and grill, and IHOP, a family-dining restaurant. DineEquity's share price plunged on the news of Mr. Conforti's departure because "this is a guy who's very well-liked by institutional investors," this person said. Mr. Conforti didn't return phone calls seeking comment. [Investors Bruise Applebee's Parent] The company said in July that it was in negotiations to sell another 60 locations by the end of the year, and Ms. Stewart reiterated Tuesday that it was on track with its refranchising plans. But the tight credit markets have made those deals seem less certain, and some interested buyers are having a more difficult time lining up financing. "It's not the best market in the world in terms of the credit markets," said Harry Rose, an Applebee's franchisee who bought three locations in Delaware. "That obviously is reflected in who would qualify to do things." Applebee's, a hot chain in the 1990s, has struggled in recent years to set itself apart from the sit-down restaurants like Chili's, owned by Brinker International Inc., and Ruby Tuesday Inc. that now crowd suburban shopping areas. Ms. Stewart, a former Applebee's executive who successfully turned around IHOP, has pledged to improve the chain's food and sharpen its marketing. The effort to turn around Applebee's has been hampered by one of the worst environments for restaurants in years. High ingredient and labor costs have driven some chains, including company-owned Bennigan's locations, out of business as pinched consumers have cut back on restaurant spending. In July, Ms. Stewart conceded that Applebee's hadn't focused enough on value in its promotions. Now the company is offering a promotion for all-you-can-eat riblets, chicken fingers, or shrimp starting at $9.99 Shares of DineEquity, which is based in Glendale, Calif., fell $6.20 to close at $17.77 in 4 p.m. composite trading Tuesday on the New York Stock Exchange. The company's stock is prone to sharper price swings than most because its shares are more concentrated in the hands of large investors. The company appointed Greggory Kalvin, its vice president and corporate controller, as interim chief financial officer and hired recruiting firm Crist\|Kolder Associates to search for a permanent replacement. DineEquity intends to look inside and outside the restaurant industry for a permanent finance chief, the person familiar with the situation said. It isn't clear whether Mr. Kalvin will be considered for the post. Write to Janet Adamy at janet.adamy@wsj.com and Joann S. Lublin at joann.lublin@wsj.com