RARE HOSPITALITY INTERNATIONAL, INC.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-9
Solicitation/Recommendation Statement under
Section 14(d)(4) of the Securities Exchange Act of 1934
RARE Hospitality International, Inc.
(Name of Subject Company)
RARE Hospitality International, Inc.
(Name of Person(s) Filing Statement)
Common Stock, no par value
(Title of Class of Securities)
753820109
(CUSIP Number of Class of Securities)
W. Douglas Benn
Chief Financial Officer
8215 Roswell Road, Bldg. 600
Atlanta, Georgia 30350
Telephone: (770) 399-9595
(Name, Address, and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of the Person(s) Filing Statement)
With Copies to:
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Cathy D. Hampton
Vice President, General Counsel and
Corporate Secretary
RARE Hospitality International, Inc.
8215 Roswell Road, Building 600
Atlanta, Georgia 30350
Telephone: (770) 551-5469
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William H. Avery
Alston & Bird LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309
Telephone: (404) 881-7000 |
x Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.
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www.darden.com |
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Red LobsterÒ
Olive GardenÒ Bahama BreezeÒ
Smokey BonesÒ Seasons 52Ò |
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NEWS/INFORMATION |
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Darden Restaurants, Inc
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RARE Hospitality International, Inc |
Corporate Relations
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8215 Roswell Road |
P.O. Box 593330
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Atlanta, GA 30350 |
Orlando, FL 32859 |
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Darden Contacts: |
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(Analysts) Matthew Stroud
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(407) 245-6458 |
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(Media) Bob McAdam
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(407) 245-5366 |
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RARE Contacts: |
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(Analysts) W. Douglas Benn
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(770) 399-9595 |
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(Media) Ellen Moran
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(404) 266-7561 |
DARDEN RESTAURANTS ANNOUNCES TENDER OFFER
TO PURCHASE RARE HOSPITALITY FOR $38.15 PER SHARE;
FURTHER POSITIONS DARDEN AS A LEADER IN THE RESTAURANT INDUSTRY
ORLANDO, FL, and ATLANTA, GA, August 16 Darden Restaurants, Inc. (NYSE:DRI) and RARE Hospitality
International, Inc. (NASDAQ:RARE), today jointly announced a definitive agreement under which
Darden will make a tender offer to purchase RAREs outstanding common stock for $38.15 per share in
cash, or approximately $1.4 billion in total purchase price. The
all-cash offer represents a 39%
per share premium over RAREs average closing stock price for the past 30 days. The transaction
received unanimous approval by the boards of directors of both companies. Darden will finance the
acquisition through cash and newly committed credit facilities. Darden expects to commence the
tender offer for all outstanding shares of RARE common stock on August 31, 2007. The transaction
is expected to be neutral to Dardens earnings per share in fiscal year 2008, excluding one-time
transaction and integration related costs and the impact of purchase price accounting adjustments.
With annual sales of $1.0 billion, RARE Hospitality currently owns, operates and franchises 317
restaurants, including 287 LongHorn Steakhouse restaurants and 28 Capital Grille restaurants.
LongHorn Steakhouse is a leader in the casual dining steakhouse category. The Capital Grille is a
leader in the premium steakhouse category, with one of the highest average unit volumes and return
on invested capital in the industry.
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The combined organization is strongly positioned to capture the long-term growth opportunity in
full-service restaurants, said Clarence Otis, Chairman and Chief Executive Officer of Darden.
Darden has been extremely successful for over a decade in delivering industry-leading
same-restaurant sales and earnings growth and top quartile S&P 500 total shareholder returns. RARE
Hospitalitys two outstanding brands and the talented leadership and restaurant teams behind them
enhance Dardens entire organization, but particularly our unit growth prospects. Darden brings
expertise in operations excellence, brand management, and national advertising and real estate
development that will help each of RAREs brands more successfully realize their national expansion
potential. And, we see significant synergies from increased efficiency and effectiveness in
purchasing, distribution and other restaurant and corporate support. With all these benefits, we
believe the combination of Darden and RARE leaves us better positioned to continue to deliver into
the future the top quartile value for shareholders thats been a hallmark of each company.
Philip J. Hickey, Jr. Chairman and Chief Executive Officer of RARE Hospitality stated We believe
this transaction represents a compelling realization of value for RAREs shareholders, offers
tremendous opportunity for our team members, and puts our brands even more firmly on a path to
achieving their full potential. The purchase price represents a meaningful premium over our recent
trading range, and a chance for our shareholders to capture the value that has been created at RARE
over the last several years. For our team members, it means becoming a part of one of the most
successful restaurant companies in history. Darden has the right culture and the resources to help
LongHorn and Capital Grille prosper in an intensely competitive industry.
Highlights
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Darden has agreed to purchase RARE Hospitality for $38.15 per
share, representing a 39% premium to RAREs average closing stock
price for the past 30 days. |
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The total value of the transaction is $1.4 billion, which includes
RAREs outstanding debt and capital lease obligations which Darden
will assume on the close. |
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Darden will utilize a $1.2 billion senior interim credit facility
and a $700 million senior revolving credit facility to finance the
transaction. Bank of America is the lead arranger on the senior
interim credit facility and the senior revolving credit facility. |
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Darden anticipates that enhanced sales growth opportunities and
meaningful cost synergies exist, driven by supply chain and
purchasing integration, increased advertising effectiveness and
consolidation of corporate and restaurant support infrastructure. |
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RARE Hospitalitys talented team of leaders will remain with the
combined company following the transition. Gene Lee, RAREs
President and Chief Operating Officer, will become President of
Dardens new Specialty Restaurant Group, which will include
Capital Grille, Bahama Breeze and Seasons 52. Leadership of
LongHorn Steakhouse will continue to be provided by David George,
who will remain its President, and John Martin will continue to
lead Capital Grille as its President. |
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LongHorn Steakhouse will report to Drew Madsen, Dardens President
and Chief Operating Officer, along with Dardens Red Lobster and
Olive Garden brands and its Supply Chain, Development and Group
Human Resources functions. Lee will join the Darden Operating
Team, which is headed by Madsen, and the Darden Executive Team,
headed by Otis. |
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Phil Hickey, RAREs Chairman and Chief Executive Officer, has agreed to serve for 12 months
as an exclusive advisor to Otis and the Darden Executive Team in connection with the
integration and execution of the combined companys growth strategy. W. Douglas Benn, RAREs
Chief Financial Officer, will continue with the combined company as a senior leader of the
team with day-to-day responsibility for integration. |
The
tender offer, which is expected to close in October 2007, is subject to regulatory clearances
and other customary terms and closing conditions, including a
termination fee of 2.9% of the fully diluted equity value of the
transaction payable to Darden under
certain circumstances. Lehman Brothers, Inc. acted as lead financial
advisor and Bank of America acted
as co-financial advisor and Wachtell, Lipton, Rosen & Katz acted as legal counsel to Darden on the
transaction, and Wachovia Securities and RBC Capital Markets acted as financial advisors and Alston
& Bird LLP acted as legal counsel to RARE.
Darden Restaurants, Inc. and RARE Hospitality International, Inc. will hold a conference call to
discuss these events on Friday, August 17 at 8:30 a.m. Eastern time. Participants will have the
opportunity to listen to the conference call over the Internet by going to www.darden.com or
www.rarehospitality.com and clicking on Investor Relations or by going to
www.videonewswire.com/event.asp?id=41936. Participants are encouraged to go to the selected
website at least 15 minutes early to register, download, and install any necessary audio software.
The archived webcast will also be available on the home page of each companys website through
September 17, 2007.
Darden Restaurants, Inc., headquartered in Orlando, FL, owns and operates nearly 1,400 Red Lobster,
Olive Garden, Bahama Breeze, Smokey Bones and Seasons 52 restaurants with annual sales of $5.6
billion.
Important Legal Information
The tender offer described herein has not commenced. The description contained herein is neither
an offer to purchase nor a solicitation of an offer to sell shares of RARE Hospitality. At the
time the tender offer is commenced, Darden Restaurants, Inc. intends to file a Tender Offer
Statement on Schedule TO containing an offer to purchase, forms of letters of transmittal and other
documents relating to the tender offer, and RARE Hospitality intends to file a
Solicitation/Recommendation Statement on Schedule 14D-9 with respect to the tender offer. These
documents will contain important information about the tender offer that should be read carefully
before any decision is made with respect to the tender offer. These materials will be made
available to the shareholders of RARE at no expense to them. Investors and security holders will
be able to obtain the documents (when available) free of charge at the SECs web site,
www.sec.gov. In addition, such materials (and all other documents filed with the SEC) will
be available free of charge at www.rarehospitality.com or www.darden.com. In addition,
RARE shareholders may obtain free copies of the documents filed with the SEC when available by
contacting RAREs Investor Relations at (770) 399-9595. Such documents are not currently
available. You may also read and copy any reports, statements and other information filed by RARE
or Darden with the SEC at the SEC public reference room at 100 F Street N.E., Room 1580,
Washington, D.C. 20549. Please call the SEC at (800) 732-0330 or visit the SECs website for
further information on its public reference room.
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Forward-looking statements in this news release are made under the Safe Harbor provisions of the
Private Securities Litigation Reform Act of 1995. These forward-looking statements could address
future economic performance, restaurant openings, various financial parameters, or similar matters.
By their nature, forward-looking statements involve risks and uncertainties that could cause
actual results to materially differ from those anticipated in the statements. The most significant
of these uncertainties are described in Darden Restaurants, Inc.s and RARE Hospitality
International, Incs Form 10-K, Form 10-Q and Form 8-K reports (including all amendments to those
reports). These risks and uncertainties include successful completion of the proposed acquisition
on a timely basis, the impact of regulatory review on the proposed acquisition, the ability to
achieve synergies following completion of the proposed acquisition, the impact of intense
competition, changing economic or business conditions, the price and availability of food,
ingredients and utilities, labor and insurance costs, increased advertising and marketing costs,
higher-than-anticipated costs to open or close restaurants, litigation, unfavorable publicity, a
lack of suitable locations, government regulations, a failure to achieve growth objectives through
the opening of new restaurants or the development or acquisition of new dining concepts, weather
conditions, risks associated with our plans to expand our newer concepts Bahama Breeze and Seasons
52, the closure and disposition of certain Smokey Bones restaurants and the anticipated sale of the
remaining Smokey Bones restaurants, and other factors and uncertainties discussed from time to time
in reports filed by the Company with the Securities and Exchange Commission.
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