Lone Star Steakhouse & Saloon, Inc. Announces Agreement to be Acquired by Lone Star Funds
Lone Star Steakhouse & Saloon, Inc. (NASDAQ:STAR) announced that it had signed a definitive agreement to be acquired by affiliates of Lone Star Funds, a Dallas-based private equity firm, for $27.10 per share in cash, a 15% premium to its closing price on August 17, 2006. The total value of the transaction is over $600 million.
The Board of Directors of Lone Star Steakhouse & Saloon approved the agreement in a special meeting today. The transaction is subject to stockholder approval and other customary conditions and is expected to be completed during the fourth quarter of 2006.
In making the announcement, Jamie B. Coulter, Chief Executive Officer of Lone Star Steakhouse & Saloon, said, "We are pleased with the terms of this transaction and believe it is in the best interests of the Company's stockholders."
Len Allen, President of Lone Star Funds' U.S. operations, said, "We have a history of buying well-known consumer brands and we believe Lone Star Steakhouse & Saloon is a great addition to our portfolio."
A special meeting of stockholders of Lone Star Steakhouse & Saloon will be announced soon to obtain stockholder approval of the transaction. In view of the pending transaction, Lone Star Steakhouse & Saloon does not anticipate paying a cash dividend for the 2006 third quarter, but intends to subsequently pay this dividend to its stockholders if for any reason the transaction is not consummated.
North Point Advisors LLC and Thomas Weisel Partners LLC are serving as financial advisors to Lone Star Steakhouse & Saloon and Piper Jaffray & Co. is serving as financial advisor to Lone Star Funds. Olshan Grundman Frome Rosenzweig & Wolosky LLP and Jenkens & Gilchrist, P.C. acted as legal advisors to Lone Star Steakhouse & Saloon and Lone Star Funds, respectively.
About Lone Star Steakhouse & Saloon, Inc.
Lone Star Steakhouse & Saloon currently owns and operates 222 domestic Lone Star Steakhouse & Saloon restaurants, 15 Sullivan's Steakhouse restaurants, five Del Frisco's Double Eagle Steak House restaurants, one Frankie's Italian Grille restaurant and 22 Texas Land & Cattle Steak House restaurants. Licensees operate four domestic and 13 international Lone Star restaurants, and one domestic Del Frisco's Double Eagle Steak House restaurant.
Logos, product and company names mentioned are the property of their respective owners.
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