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Which Restaurants Will Be Acquired After Benihana?

Benihana Comparable Sales Increase of 4.5% for the Quarter
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It was revealed on Tuesday that Benihana (NASDAQ: BNHN) is to be acquired by the private equity group Angelo, Gordon & co for $296 million, and the company's stockholders will each receive $16.30 per share.

The terms of the agreement have been approved by the Benihana board of directors and the price of $16.30 per share represents a premium 46% percent over the average closing share price for the 30 days ended March 13, 2012 which is the date that the company publically stated that is was looking into strategic alternatives.

CEO Richard C. Stockinger said, "This is a win for our growing base of loyal customers who enjoy our restaurants every day, and for our future customers in markets hungry for the dramatic, high-quality Japanese dining that only our brands can deliver. Our management and restaurant professionals have done a tremendous job of accelerating and strengthening performance through our renewal efforts. After evaluating the Company's strategic alternatives, we are pleased to reach agreement with Angelo Gordon. We feel that this transaction with Angelo Gordon recognizes the value of the Benihana brands and delivers a significant cash premium to the Company's shareholders."

"We believe that partnering with Angelo Gordon will help Benihana continue its track record of profitable growth, and we look forward to working with Richard and his team."

The news comes hot on the heels of P.F. Chang's (NASDAQ: PFCB) own foray into private equity, after it was taken private earlier in the spring.

PFCB announced on Tuesday that the Federal Trade Commission has granted early termination of the Hart-Scott-Robino waiting period, which should clear the way for the proposed acquisition by Wok Acquisition, a newly formed entity wholly owned by Centerbridge Partners.

So the question now is, who is next? Who will be acquired after Benihana and P.F. Chang's? Which restaurants will look attractive to the big money men?

The Cheesecake Factory (NASDAQ: CAKE) has to be worth a look. The brand is extremely strong, and there are opportunities for growth as there are still many areas that don't have a branch nearby. CAKE saw its first-quarter profit edge up slightly, as it continues to attract more customers. For the quarter ending April 3, CAKE earned $20.7 million, or 37 cents per share.

Texas Roadhouse (NASDAQ: TXRH) is having a good year so far too, seeing 14% revenue growth in the first quarter. Like CAKE, it is successfully bringing more people into its restaurants during a difficult economic climate with consumer spending down. That would surely look attractive to any investor.

Despite the fact that it also has a strong brand name, Red Robin Gourmet Burgers (NASDAQ: RRGB) might not be quite as ripe for a takeover after its earnings on May 16 revealed that the company missed estimates on revenues, although it beat expectations on earnings per share. Still, compared to the previous year its revenue of $299.5 million was an increase so it shouldn't be ignored.

Ruby Tuesday (NYSE: RT) was downgraded by TheStreet ratings from a Buy to a\a Hold just a couple of weeks ago, as it continues to underperform. Still, the brand is strong and it could be seen as bargain buy for somebody who likes a project.

Follow me @BCallwood.

Posted-In: News Guidance Restaurants M&A Trading Ideas General


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