MINNEAPOLIS Buca Inc., operator of the 88-unit Buca di Beppo Italian dinnerhouse chain, said Tuesday that it has agreed to be acquired by Planet Hollywood International Inc. in a deal valued at $9.7 million.
Asubsidiary of Planet Hollywood offered a buyout bid of 45 cents per share for the struggling casual-dining operator. The purchase price is a 41-percent premium over Buca’s closing price on Monday of 32 cents per share. Buca’s stock price has taken a large hit during the past year, with a high of $3.48 per share reached nearly a year ago on Aug. 6, 2007, and a low of 28 cents hit last week.
The buyout agreement also includes a separate $3.5 million secured subordinate loan that Planet Hollywood has pledged to Buca.
The casual-dining brand has struggled for years with declining same-store sales and increased net losses. For the second quarter ended in June, Buca reported a same-store sales decline of 5.1 percent and a consolidated revenue drop of 6.8 percent to $57.9 million. The company also has been closing underperforming units.
Buca first said last December that it would begin to explore options for the company, including a possible sale, and retained banker Piper Jaffray & Co.
Buca president and chief executive John Bettin said in a statement that the company’s board of directors agreed the deal with Planet Hollywood “represents the best overall value for our shareholders.” Bettin said that the financing would provide Buca with the liquidity needed to move forward.
Robert Earl, Planet Hollywood chief executive and founder, said the company is “delighted to welcome Buca di Beppo to the Planet Hollywood family as part of our ongoing strategy to introduce new brands into our restaurant group while simultaneously expanding our lodging and casino operations.”
Planet Hollywood, which is based in Orlando, Fla., owns the namesake resort and casino in Las Vegas along with other restaurant, retail and gaming operations.
Under terms of the agreement, a tender offer is expected to begin on or before Aug. 12 and to remain open for 20 business days. The deal requires the tender of at least a majority of Buca’s outstanding shares and other customary closing conditions.