P.F. Chang’s Reaches $1.09B Deal to Go Private
SCOTTSDALE, Ariz. (AP) - P.F. Chang's is being acquired and taken private by a private equity firm in a deal valued at about $1.09 billion.
Under the terms of the agreement released Tuesday, New York's Centerbridge Partners LP will buy shares of P.F. Chang's China Bistro Inc. for $51.50 each. The cash offer represents a 40 percent premium over the company's Monday closing stock price.
The news sent shares of P.F. Chang's soaring $12.06, or 30 percent, to $51.75 in premarket trading.
The Scottsdale, Ariz. company which along with its namesake restaurants runs the Pei Wei and True Food Kitchen chains, has run into some headwinds lately.
The company on Tuesday said first-quarter profit dropped 41 percent and same store sales slipped again.
Earlier this month, the company rolled out a new menu to lure more budget-minded restaurant goers.
Centerbridge will begin a tender offer for P.F. Chang's shares no later than May 15. In order for the deal to close, about 83 percent of the shares need to be tendered. P.F. Chang's said it can also seek out competing bids until May 31.
The deal, which has been approved by the company's board, but remains subject to regulatory approval, is expected to close in the third quarter.
For the quarter ended April 1, P.F. Chang's earned $6.3 million, or 30 cents per share, down from $10.6 million, or 46 cents per share, in the same quarter last year.
Excluding one-time gains and losses, the company said it posted an adjusted profit of 35 cents per share for the recent quarter.
Revenue edged up slightly to $318.9 million from $317.4 million.
The profit fell a penny short of Wall Street predictions. Analysts, on average, expected a profit of 36 cents per share on $321.8 million in revenue, according to a FactSet poll.
Revenue at stores open at least a year fell 0.6 percent at the company's namesake restaurants and 1.7 percent at Pei Wei restaurants. The metric is a key measure of retail health because it excludes sales at stores that opened or closed during the year.