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Retail

Applebee’s Buyout: Virtually a ‘Take-Under’ (APPB, IHP)

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By Douglas A. McIntyre Updated Published
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Back in February we noted that there wasn’t exactly a whole lot of value to Applebee’s (NASDAQ:APPB) at the $27.25 level when it decided to explore strategic alternatives.  Someone did find value, but at a lower price.  IHOP Corp. (NYSE:IHP) has decided to acquire Applebee’s for $25.50 per share in an all cash transaction.  Interestingly enough, IHOP has a mere $980 million market cap and this acquisition is valued at roughly $2.1 Billion.

IHOP will finance part of the deal on its own by franchising out 500 of the company-owned stores.  Including current frnachises, Applebee’s currently has 1,943 locations.

If you bought into this back in February after the ‘strategic alternatives’ announcements, congratluations on the take-under.  The sad part is that this is actually a decent offer for the restaurant chain.  The company had peaked out geographically and if it was not able to become part of another chain it was probably going to have to branch out into a different brand via an acquisition of its own to spur growth.

Jon C. Ogg
July 16, 2007

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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