J. Alexander's ball back in Fidelity National's court

Chain's board strikes deal with rival bidder; title insurer has until Friday to match

The bidding for restaurant chain J. Alexander's appears to have been reduced to two, and the timeline for a resolution could be just days away.

The board of J. Alexander's late last week came to terms with so-called Party F, which has offered to pay $14.25 per share in cash for the West End-based company. That trumps by $1.25 the per-share price Fidelity National had agreed to five weeks ago. J. Alexander's directors late last week also determined that the $14-per-share offer from Party G no longer has the potential to be pulled off. (That decision came after Party G's representatives said last week their offer would drop to $13.75 unless J. Alexander's chose them by Thursday.)

Per the agreement J. Alexander's signed with Fidelity National in late July, the Florida-based title insurer — which snapped up O'Charley's earlier this year — now has until Friday to renegotiate its terms. Upon being told of the Party F agreement late last week, "Fidelity indicated orally and on a preliminary basis to the Company that it would consider matching the price offered by Party F, but only if the Company agreed to a substantial increase in the current $2.16 million break-up fee."

J. Alexander's officials may be loath to accept that. They already are facing a putative class action that accuses the board of not having lived up to its fiduciary duties, and their largest shareholder called on them last week to stop favoring Fidelity National.

In its latest filing with the Securities and Exchange Commission, J. Alexander's officials also provided some new detail about Party F's bid, saying it will be financed 50/50 with cash on hand and new secured borrowings.

At about 11:30 a.m. Tuesday morning, shares of J. Alexander's (Ticker: JAX) were changing hands at $14.47, down slightly on the day.