Two investment firms are seeking to buy Dine Brands prompting a potential ownership change for the parent of Applebee’s, IHOP, and Fuzzy’s Taco Shop.
Cobblers Cove Capital and Arkhouse Management submitted an offer to Dine’s board worth $39 per share in cash, Bloomberg reported, citing people familiar with the matter. The proposal represents a premium of approximately 33 percent to the company’s average share price over the preceding 30 days.
Dine then announced that its board unanimously adopted a limited-duration shareholder rights agreement.
Commonly called a poison pill, the agreement is meant to prevent a buyer from gaining control without paying an appropriate premium to all shareholders. The measure also gives the board time to evaluate developments and make decisions in shareholders’ best interests.
The firms are willing to raise their offer pending due diligence and access to Dine’s management, according to Bloomberg.
The reported offer comes as sales trends vary across Dine’s portfolio. Domestic same-store sales declined 1.8 percent at Applebee’s in the second quarter ended June 28, compared with increases of 1.5 percent at IHOP and 4.6 percent at Fuzzy’s. Lower traffic weighed on Applebee’s results, partially offset by higher average checks. IHOP’s growth came from higher average checks that offset a decline in traffic.
Dine finished the quarter with 1,557 Applebee’s restaurants and 1,813 IHOP restaurants worldwide, plus 97 Fuzzy’s locations domestically.
The restaurant group reports Q3 earnings on November 4.
Dine Brands’ current structure dates to November 2007, when IHOP Corp. acquired Applebee’s. The company changed its name to DineEquity in 2008 and became Dine Brands Global in 2018. It expanded into fast casual in December 2022 with the acquisition of Fuzzy’s Taco Shop for $80 million in cash.
