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Carl's Jr. owner CKE Inc. postpones IPO

August 09, 2012|By Tiffany Hsu
  • Carl's Jr. owner CKE postponed its planned IPO because of "market conditions."
Carl's Jr. owner CKE postponed its planned IPO because of "market… (Ken Hively / Los Angeles…)

Carl’s Jr., the stalwart but occasionally star-crossed California burger chain launched seven decades ago with a single hot dog cart, was supposed to get a second chance on Wall Street this week. Instead, owner CKE Inc. has decided to postpone its IPO.

The Carpinteria-based company said late Thursday that “due to market conditions it has determined not to proceed with its previously announced initial public offering of common stock at this time.”

The operator of the Carl’s and Hardee’s fast-food chains had widely been expected to price its shares Thursday and then list them on the New York Stock Exchange on Friday. Analysts had pegged the offering as raising $200 million.

But from the get-go, this IPO was to be vastly different than when founder Carl Karcher triumphantly took the chain public for the first time in 1981. The company, which is loaded with more than $700 million in long-term debt, hasn’t turned an annual profit for two straight years since being acquired by current owner, private equity giant Apollo Management.

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Carl’s Jr. and Hardee’s, already losing ground in a highly-competitive fast-food burger market, are being squeezed further by new rivals such as Five Guys Burgers and Fries and Smashburger.

Same-store sales at the company rose 3.5% in the fiscal 2012 year after sliding the previous two years. But during that period, CKE, which has more than 3,000 restaurants, also suffered a $6.2 million net loss.

CKE’s shares swung wildly during the company’s previous stint on the public markets. Apollo paid $12.55 a share in 2010 to take the company private. Both CKE and Apollo had planned to sell about 6.7 million shares in the IPO.

But now, the fast-food company will miss out on what has been a busy season for newly-public restaurant chains, including recent launches from Burger King and Outback Steakhouse owner Bloomin’ Brands.

ALSO:

Carl's Jr. owner CKE estimates IPO at $14 to $16 a share

Carl's Jr., Hardee's owner CKE files for $100-million IPO

Burger King debuts again on NYSE; stock rises nearly 12%

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