CKE Sold for $928 Million

CKE Restaurants Inc., owner of Carl's Jr. and Hardee's quick-service restaurant chains, and Thomas H. Lee Partners (THL) announced that they have entered into a definitive merger agreement under which THL will acquire CKE for approximately $928 million, including the assumption of approximately $309 million of net debt.

Under the terms of the agreement, CKE stockholders will receive $11.05 in cash for each share of CKE common stock they hold, representing a 24 percent premium to the company’s closing share price on February 25 and a 29 percent premium to the company’s volume weighted average closing share price of approximately $8.60 during the 30 trading days ended February 25.

“We are excited to announce this transaction, which provides substantial value to our shareholders,” says Byron E. Allumbaugh, CKE’s chairman of the board.

“We believe this transaction provides excellent value to our shareholders and represents an exciting opportunity to continue the growth and development of CKE Restaurants in partnership with THL,” says Andrew F. Puzder, CEO of CKE Restaurants. “THL’s proven history of success as an investor and value-added partner to its portfolio companies, coupled with its deep financial expertise and experience in the consumer sector, will also benefit all of our stakeholders, including our franchisees and our employees.”

“THL is pleased to partner with CKE’s seasoned management team to continue building on the company’s powerful brands and strong position in the marketplace,” says Todd Abbrecht, managing director of THL Partners. “We are committed to making this great company even better, and to working together with the entire organization to provide an even stronger foundation for value creation, expansion and profitable growth.”

In addition, under the merger agreement, CKE Restaurants will actively solicit superior proposals from third parties for a period of 40 days continuing through April 6. CKE Restaurants does not intend to disclose developments with respect to this solicitation process unless and until its board of directors has made a decision regarding any superior proposals that may be made. There can be no assurances that this solicitation will result in a superior proposal.

The transaction is expected to close in the second quarter of 2010, subject to approval by CKE shareholders, regulatory approval, and other customary closing conditions.

UBS Investment Bank is acting as financial advisor to CKE. Stradling, Yocca, Carlson & Rauth is acting as legal advisor to CKE. Ropes & Gray LLP is acting as legal advisor to THL. BofA Merrill Lynch and Barclays Capital are acting as financial advisors to THL. Affiliates of BofA Merrill Lynch and Barclays Capital have provided a financing commitment to THL to support the transaction.