The board of J. Alexander's has voted to sell the upscale casual restaurant chain to Fidelity National Financial, the same holding company that earlier this year snapped up O'Charley's.
Jacksonville-based Fidelity National will pay $72 million for J. Alexander's under a deal that still needs regulatory clearance. Shareholders can choose to get $12 in cash — the last time J. Alexander's shares traded that high was in late 2007 — or $3 in cash and one share of American Blue Ribbon Holdings, FNF's majority-owned restaurant arm. J. Alexander's officials also have a 30-day window to look for a better deal.
The planned sale to FNF comes less than five months after Atlanta-based investment managers Privet Fund went public with a push to overhaul J. Alexander's board. Privet manager Ryan Levenson and Ben Rosenzweig, who own 10 percent of the company, have argued that directors have been too passive in the face of lackluster results and were pushing for two board seats.
“We believe this transaction will provide significant benefits for our shareholders,” said J. Alexander's Chairman, President and CEO Lonnie Stout. “It not only rewards them with a cash premium for their existing shares, it offers them participation in the future business prospects of a much larger entity. We think that FNF’s track record, experience and commitment to creating shareholder value will be a great benefit for our shareholders going forward.”
Any American Blue Ribbon shares issued to J. Alexander's investors will be listed publicly, a first for that entity. Following the $220 million acquisition of O'Charley's, American Blue Ribbon now has $1.3 billion in revenues, to which J. Alexander's would add about $200 million. Other brands under its umbrella include Max & Erma's, Village Inn and Bakers Square.
Shares of J. Alexander's (Ticker: JAX) closed Friday trading at $9.90 and have risen almost 60 percent this year.