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CKE buys Pirate's stake for $77M

CARPINTERIA Calif. Carl's Jr. parent CKE Restaurants Inc. said it has agreed to pay $77.3 million, or $18.97 per share, for all 4.1 million shares of its stock that are held by the hedge fund Pirate Capital LLC.

CKE said it would use its revolving credit facility to fund the transaction, which it termed a part of its previously announced stock repurchase program.

Pirate's stake amounts to 6.1 percent of total CKE shares outstanding, the restaurant company said. The average price Pirate paid to amass the shares was not disclosed by either party. At one point the hedge fund held a 10.1 percent stake in CKE. Norwalk, Conn.-based Pirate sold some 2 million shares back to the company in December.

Matt Goldfarb, a former executive of Pirate, sits on CKE's board.

Pirate had pressured CKE in early 2006 to sell the real estate under its units and use the funds to buy back stock. The discussion led to Goldfarb's appointment to the board while he was still a part of Pirate's team.

Pirate has also amassed and liquidated a sizeable holding in OSI Restaurant Partners Inc., parent of the Outback Steakhouse and Carrabba's Italian Grill casual-dining chains.

In addition to Carl's Jr., CKE is the franchisor of the Hardee's and La Salsa Fresh Mexican Grill quick-service chains. It is based here.

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