CKE pulls planned IPO, cites 'market conditions'
Today on The Daily Meal
CKE Restaurants Inc., parent to the Hardee’s and Carl’s Jr. quick-service restaurant chains, said late Thursday that it will not proceed with a planned initial public offering that was scheduled for today.
In a short statement issued on the eve of the company’s planned return to public markets, CKE officials said it has determined not to proceed with the IPO due to “market conditions.”
Earlier this year, Carpinteria, Calif.-based CKE hoped to raise as much as $230 million with a return to the New York Stock Exchange. The offering of 13.3 million shares of common stock was initially priced between $14 and $16 per share.
The week started optimistically, with much for restaurant-friendly investors to chew on.
Bloomin’ Brands Inc., parent to the Outback Steakhouse chain, held an IPO on Wednesday. Though the amount of stock issued and the price was slashed the day before the market debut, the stock price has climbed through the week to $13.49 late Thursday from the opening of $11.60.
Still, the week also brought discouraging news from McDonald’s, which saw same-store sales slip in July at each of the chain’s divisions, including the United States.
While some hold McDonald’s’ slip as an example of worsening trends within the quick-service segment, others point to improving sales at Burger King, Wendy’s and Taco Bell as a counter argument, saying the quick-service giant may be losing market share to competing brands.
CKE, which was taken private by Apollo Management in a $700 million deal in 2010, has also shown improving trends this year.
The company swung to a profit in its May-ended first quarter, reporting net income of $9.5 million, compared with a loss of $2.6 million a year earlier. Revenue for the latest quarter rose 3 percent to $412 million, and blended same-store sales for company-owned locations increased 2.6 percent.
CKE was planning to use income from the IPO to reduce its net debt of $654 million to a projected $590 million.
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