A Newport Beach restaurateur, whose company earlier this year bought Stuart Anderson's Black Angus and Velvet Turtle chains, is seeking to buy a firm that owns the Acapulco Restaurants chain, based in Long Beach, and Mama Leone's in New York.
In a merger proposal valued at more than $80 million, Anwar S. Solimon has offered to buy all of the outstanding stock of Restaurant Associates Industries, which owns and operates more than 100 restaurants and 154 Eastern Lobby Shops newsstands.
If completed, the transaction would extend the privately owned company, American Restaurant Group of Newport Beach, into the East Coast market and could make it one of the top 20 restaurant groups in the United States in total sales. Solimon is chairman of the company.
New York-based Restaurant Associates operates restaurants through several divisions, including 27 East Coast dinner house units of Charlie Brown's; the R.A. Restaurant Group of more than 30 restaurants, including Mama Leone's, and a six-unit casual theme restaurant chain in New Jersey.
The company receives nearly a fourth of its revenue from the 42 units of Acapulco Restaurants, the second largest Mexican restaurant chain in California.
And in December, it acquired 10 Casa Vallarta restaurants in California that are being converted into Acapulcos.
The unsolicited proposal from Solimon offers $16.50 per share for all of the common stock of New York-based Restaurant Associates.
Restaurant Associates, traded on the American Exchange, has two classes of common stock.
Its Class A shares, which have reduced voting rights, closed Thursday at $14.25 per share, up 87.5 cents.
The company's Class B shares, which have 10 times the voting power of Class A stock, closed at $14.375 per share, up $1.
Nearly 40% of the 2.9 million Class B shares are owned by officers and directors of Restaurant Associates, making a hostile takeover of the company more difficult to accomplish. The company has 2.5 million shares of Class A stock.
Solimon's offer comes one week after two top executives of Restaurant Associates--Martin Brody, chairman and chief executive officer, and Max Pine, president and chief operating officer--announced a proposal to take the company private through a leveraged buyout. Executives with Restaurant Associates were unavailable for comment Thursday.
A special committee of Restaurant Associates' board of directors is reportedly meeting with Solimon today to review his proposal.
Solimon, an Egyptian who resigned as group executive of W. R. Grace & Co.'s 690-unit restaurant division to head American Restaurant Group, could not be reached for comment.
American Restaurant Group was founded by Solimon last December to purchase restaurants from Marriott, including the Stuart Anderson's Black Angus, and Velvet Turtle chains.