CALABASAS HILLS Calif. The Cheesecake Factory Inc. increased its share repurchase authorization by 10 million shares, the company reported Wednesday, bringing its total buyback plan to 12.4 million shares, or about 16 percent of total shares outstanding.
Cheesecake, which operates 123 namesake dinnerhouses and nine Grand Lux Cafe restaurants, said it would repurchase $200 million of its shares of common stock through a broker-dealer in an accelerated share repurchase transaction. The company said it would fund the repurchase with cash on hand and a temporary $150 million credit facility.
Subsequently, Cheesecake plans to secure a new revolving $200 million credit facility to replace the temporary credit arrangement and its current $35 million credit agreement, the company said. Funds also will be available to the company for other corporate purposes, of which Cheesecake did not detail.
The new credit facility will take Cheesecake, which currently boasts no funded debt on its balance sheet, to a more leveraged structure. The move echoes similar debt-funded share repurchase plans at other restaurant companies including Brinker International Inc., Applebee's International Inc. and CBRL Group Inc.