CKE Restaurants, Inc. Investor Files Lawsuit Against Takeover

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Company Name(s): 
CKE Restaurants
Case Name: 
CKE Restaurants Acquisition 03/8/2010
Case Status: 
Lawsuit Filed
Affected Securities
NYSE: CKR
Lawsuit Overview
Type of Lawsuit: 
Mergers and Acquisition
Date Filed: 
03/08/2010
Class Period End: 
02/26/2010
Summary: 

An investor in CKE Restaurants filed a lawsuit in State Court on behalf of current long term shareholders in CKE Restaurants, Inc. (Public, NYSE:CKR) over alleged breaches of fiduciary duty in connection with an alleged unfair takeover.

According to the complaint the plaintiff alleges breaches of fiduciary duty arising out of the attempt to sell CKE Restaurants, Inc. (NYSE:CKR) to Thomas H. Lee Partners.

On Friday, Feb 26, 2010 CKE Restaurants, Inc. (NYSE:CKR) and Thomas H. Lee Partners announced that they have entered into a definitive merger agreement under which Thomas H. Lee Partners will acquire CKE Restaurants 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. According to CKE Restaurants, Inc the offer represents a 24% premium to its closing share price on February 25, 2010 and a 29% premium to the Company's volume weighted average closing share price of approximately $8.60 during the 30 trading days ended February 25, 2010.

The plaintiff alleges that CKE Restaurants, which owns and licenses Carl's Jr. and Hardee's, is selling itself too cheaply to Thomas H. Lee Partners.

Shares of CKE Restaurants, Inc. (CKR) traded after the news at $11.10 per share and at $9 per share days before the news. CKR shares were down from its52weekHigh of $ 11.52 per share, $13.54 per share in September ‘08, and $22.95 per share in Jun 2007.