| Steak n Shake, Western Sizzlin detail merger
By Bret
Thorn
INDIANAPOLIS
(Oct.
23,
2009)
Steak n Shake Co. and Western Sizzlin Corp. said Friday they have signed an agreement to merge in a deal worth $38.8 million. The agreement, first announced as a plan in August, must still garner shareholder approval from Western Sizzlin’ and includes a 30-day “go-shop period” where additional acquisition proposals can be entertained, according to filings with federal securities regulators.
Details of the proposed deal show that Steak n Shake, the parent to the 468-unit family dining chain, would become a subsidiary to Western Sizzlin, operator or franchisor to the namesake 105-unit steak buffet chain. Both companies are led by former activist investor Sardar Biglari.
The deal is expected to close through a special dividend to Western Sizzlin shareholders in the form of 1.3 million shares of Steak n Shake stock that is owned by an investment division of Western Sizzlin. The merger agreement also calls for Steak n Shake to issue and deliver to Western stockholders Steak n Shake unsecured debt with a principal amount of nearly $23 million. At the effective time of the merger, each share of Western’s common stock would be converted into the right to receive debentures equal to $8.08 per share, the companies said.
Contact Bret Thorn at bthorn@nrn.com.
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