Shareholders of Applebee's International Inc. today approved a $1.9 billion offer from pancake house operator IHOP Corp. to buy the casual dining chain. More than 70 percent of shares voting approved the agreement, which had been criticized by some as shortchanging shareholders.
Under terms of the deal, shareholders of Applebee's will be paid $25.50 per share. Glendale, Calif.-based IHOP is also assuming $155 million in Applebee's debt as part of the deal. The sale is expected to close by Nov. 29. The combined company would have $6.8 billion in annual sales and more than 3,200 restaurants.
Officials at both companies have characterized the deal as a way to help rejuvenate Applebee's, one of the nation's largest restaurant chains. Its profits and sales have fallen in the past year. The deal is viewed as a coup for IHOP, which is smaller than Applebee's but has had success in building its own brand and sales in the face of economic headwinds.
Julia Stewart, IHOP's chief executive officer and a former Applebee's executive, has said she plans to franchise hundreds of Applebee's company-owned stores and sell real estate tied to around 200 of those stores as a way to pay for the deal.