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CKE to Buy Santa Barbara Group

November 20, 2001|Times Wire Services

CKE Restaurants Inc., owner of Hardee's and Carl's Jr. hamburger chains, said it agreed to acquire Santa Barbara Restaurant Group Inc., gaining direct ownership of the Green Burrito restaurant chain in a $52-million stock swap.

The deal will eliminate further royalties that CKE, Green Burrito's largest franchisee, pays to Santa Barbara, while also giving CKE an opportunity to expand the La Salsa Mexican-style chain, the companies said.

Restaurant and title insurance magnate William P. Foley II is chairman of both CKE and Santa Barbara.

Under terms of the proposed agreement, each Santa Barbara share will be converted into 0.5 share of CKE, worth $4.01 based on CKE's closing price Monday.

Anaheim-based CKE has the right to terminate the purchase if its share price rises above $9.50. Santa Barbara will be able to do the same if CKE shares fall below $6.25.

CKE shares rose 16 cents to $8.01 on NYSE, while Santa Barbara shares rose $1.17 to $3.52 on Nasdaq SmallCap.

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