Collins Foods International, the majority owner of Naugles, said Tuesday that it has proposed to acquire the 8% of the company it doesn't already own in a stock swap valued at $9.9 million.
Collins said it will exchange $4.50 worth of its common stock for each of the 2.2 million shares of Orange-based Naugles' common stock outstanding--a premium to Naugles' public shareholders of approximately 30% above the current trading price.
The deal still must be approved by directors of the Mexican fast-food restaurant chain.
Industry analysts on Tuesday hailed the proposal as a move that could further bolster Naugles' management, sales and financial status.
Los Angeles-based Collins, which acquired control of Naugles 14 months ago, already has pumped a considerable amount of money into the company, financed a major regional television advertising campaign for Naugles and has been bolstering its management team.
"We found it administratively very difficult and not very efficient" to operate Naugles as a public company, said Christopher Thomas, Collins' vice president of finance.