Case Study : Cke Restaurants, Inc.

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Introduction CKE Restaurants, Inc. CKE Restaurants, Inc. is a quick service restaurant that operates in 42 states and 28 countries. The company operates their own restaurants, while also offering franchises and licenses. Revenue for the company is generated through franchisee fees, licensee fees, sales at company owned restaurants, sale of food and packaging products, rental revenue, and equipment sales. CKE Restaurants, Inc. (CKE) operates under four brands: Hardy’s, Carl’s Jr., Red Burrito, and Green Burrito. Over the past year, the company has renovated a number of restaurant locations and combined dual-branded restaurants. By combining brands, CKE has been able to reduce the general selling and administrative expenses by 5.1% this year. Even though CKE is consolidating its resources, the company suffered a decrease in sales this past year at the various restaurants and an overall decrease in revenue. However, the decreases did not negatively affect the net income of CKE since it increased and allowed the company to pay a dividend of $0.24 per share outstanding. Then, on February 26, 2010 CKE announced a possible merger agreement with THL. In order to acquire CKE, THL was willing to pay $11.05 per share of stock. However, the merger did not take place and on April 26, 2010 CKE announced it was no longer going to be acquired by THL and was now moving forward with an acquisition by Apollo Global Management. Apollo Global Management Apollo Global Management (Apollo) is a

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