CKE to repurchase its shares from hedge fund
Carpinteria-based CKE Restaurants Inc., owner of the Carl’s Jr. and Hardee’s hamburger chains, will buy back 6.1% of its shares from hedge fund Pirate Capital, its biggest investor.
The buyback of 4.07 million shares will cost $77.3 million, based on Monday’s closing stock price of $18.97. Shares closed Tuesday at $19.
Pirate Capital will no longer own a stake in the company after the sale, CKE said in a statement.
CKE has cut its long-term debt by 25% in the last year, part of a financial strategy to boost shareholder value via stock buybacks.
The company, which doubled its repurchase plan to $200 million in January, bought 2 million shares back from Pirate Capital in December.
CKE will finance the transaction, which will be completed by April 5, with debt.
Pirate Capital owned 7.5% of CKE as of Dec. 31, according to a Feb. 14 regulatory filing, making it the largest investor at that time. The fund did not return calls for comment.
CKE had a total of 3,105 franchised or company-owned restaurants as of Jan. 29.
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