Private Capital increases bid for Claim Jumper

Private Capital Partners, the proposed buyer of the Claim Jumper casual-dining chain, was affirmed by a bankruptcy court as having the best offer so far after the group increased its bid to match that of Landry’s Restaurants Inc. earlier this week.

Other potential buyers have until Oct. 26 to submit qualified offers before an auction is scheduled on Oct. 28. The bankruptcy court is scheduled to select the highest and best offer on Nov. 2.

Irvine, Calif.-based Claim Jumper filed Chapter 11 bankruptcy on Sept. 10 and announced plans to sell most of its assets to an affiliate of investment firm Canyon Capital Advisors LLC.

At the time, the company said it would continue to consider competing offers, however, and hired Piper Jaffray & Co. as financial advisor.

The proposed buyer, Private Capital, is a current investor in the 45-unit chain. In its initial bid, the group offered $52.8 million, which includes a cash price of $24.5 million and the assumption of certain liabilities. The agreement included a $1 million break up fee.

On Wednesday, however, Private Capital revised its bid to increase the cash amount by $2.5 million, increase the amount of liabilities assumed — though the exact amount was unclear — and eliminate the break up fee, according to Anita-Marie Laurie of Sitrick and Co., who serves as a spokeswoman for the Claim Jumper restructuring process.

The revised bid essentially matched an offer earlier this week by Landry’s Restaurants Inc., based in Houston, which totaled $55.3 million, including a cash purchase price of $27 million, assumption of liabilities and no breakup fee.

It remains unclear whether Landry’s, operator of about 174 restaurants including the Rainforest Café, Saltgrass Steak House and Landry’s Seafood House chains, will make a better offer.

Attorneys for Landry’s did not respond to calls by press time.

In its ruling on the bids Wednesday, the court did not address objections raised by Landry’s and Claim Jumper founder Craig Nickoloff, who argued that the deal required more “heightened scrutiny,” given Claim Jumper’s relationship with Black Canyon Capital Partners, a debt holder and affiliate of Canyon Capital Advisors that previously had made bids to buy Claim Jumper.

Nickoloff, a shareholder, previously had bid on the chain.

Earlier this year, Black Canyon exercised its proxy rights to add two members to Claim Jumper’s board just before Private Capital was selected as the best bidder in September, according to court documents filed by Nickoloff.
 
Read more: Landry's counters investor's offer to buy Claim Jumper [3]

Laurie said Private Capital and Black Canyon are separate funds that share some employees. Private Capital is funded by Canyon Capital, and Black Canyon is funded by institutional investors.


Contact Lisa Jennings at [email protected] [4].