CKE Restaurant Group Inc., operator of the Carl’s
Jr. and Hardee’s chains, on Monday said it plans to acquire Santa Barbara Restaurant Group Inc. in a stock deal valued at more than $60 million.

Santa Barbara Restaurant operates the La Salsa, Timber Lodge Steakhouse, and Green Burrito restaurant chains. The deal will eliminate royalties that CKE, Green Burrito’s largest franchisee, pays to Santa Barbara, while also giving CKE an opportunity to expand the La Salsa Mexican-style chain, the companies said.

The agreement calls for each share of Santa Barbara Restaurant Group to be converted into the right to receive 0.50 shares of CKE common stock. The value assumes CKE’s Friday closing price of $7.85 a share and 15.411 million Santa Barbara shares outstanding, including options.

If the average CKE common share price is less than $6.25, Santa Barbara will have the right to terminate the agreement, and if the average CKE common share price is greater than $9.50, CKE will have the right to terminate the agreement.

The price will be based on the average closing price of CKE common stock during the 10-day trading period ending on and including the second business day immediately prior to the effective time of the merger.

Shares of CKE rose 16 cents, or 2 percent, to $8.01 Monday.

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