Ruby Tuesday, Inc. (NYSE:RT) today announced an agreement to be
acquired by a fund managed by NRD Capital (“NRD”), an Atlanta-based
private equity firm that specializes in franchised and
multi-location business investments.
Under the terms of the agreement, NRD will
acquire all of Ruby Tuesday’s common stock for $2.40 per share in
cash and will assume or retire all debt obligations for a total
enterprise value of approximately $335 million, excluding
transaction expense. The purchase price represents a premium of
approximately 37% over Ruby Tuesday's closing share price on March
13, 2017, the day before the Company announced its intention to
explore strategic alternatives, and a premium of approximately 21%
over Ruby Tuesday’s closing share price on October 13, 2017.
“The Board of Directors and our advisors have
thoroughly evaluated all options available to the Company and are
confident that this agreement will provide the most promising
opportunity to realize the highest value for our stockholders while
providing the best path forward for the Ruby Tuesday brand, its
employees, franchisees, and loyal customers,” said Stephen Sadove,
Non-executive Chairman of Ruby Tuesday. “NRD Capital has a
distinguished track record of achieving and maintaining profitable
growth for restaurant concepts and will be an excellent partner to
lead Ruby Tuesday going forward.”
The transaction has been unanimously approved by
Ruby Tuesday’s Board of Directors and NRD and is subject to
shareholder approval and other customary closing conditions. The
acquisition is expected to be completed during the first calendar
quarter of 2018. UBS Investment Bank is serving as financial
advisor to Ruby Tuesday and provided a fairness opinion to the Ruby
Tuesday Board of Directors.
“Our focus at NRD is investing in quality
restaurant companies and providing strategic and operational
expertise to create sustainable value. With a
well-established brand, differentiated from other casual dining
restaurants by its Garden Bar, we see significant opportunities to
drive value for Ruby Tuesday,” said Aziz Hashim, founder of NRD.
“We are excited to be part of the Company’s next chapter. As a
private company, we will be able to take a long-term view on Ruby
Tuesday, allowing us to make an investments in people, product, and
customer experience, without public company constraints. This
approach will enable us to reward everyone involved in our success,
in addition to our investors.”
Davis Polk is serving as legal advisor to Ruby
Tuesday. Cheng Cohen is serving as legal advisor to NRD and
Arlington Capital Advisors is serving as financial advisor to
NRD.
About Ruby Tuesday, Inc.
Ruby Tuesday, Inc. owns and franchises Ruby
Tuesday brand restaurants. As of September 5, 2017, there were 599
Ruby Tuesday restaurants in 41 states, 14 foreign countries, and
Guam. Of those restaurants, we owned and operated 541 Ruby Tuesday
restaurants and franchised 58 Ruby Tuesday restaurants, comprised
of 17 domestic and 41 international restaurants. Our Company-owned
and operated restaurants are concentrated primarily in the
Southeast, Northeast, Mid-Atlantic, and Midwest of the United
States, which we consider to be our core markets. For more
information about Ruby Tuesday, please visit www.rubytuesday.com.
Ruby Tuesday, Inc. is traded on the New York Stock Exchange
(Symbol: RT).
About NRD Capital
NRD Capital invests in brands that offer
superior products or services and compelling unit-level economics
in order to help them strategically grow through the power of
franchising. The fund was founded in 2014 by Aziz Hashim, one of
the world’s leading experts on franchising, with the goal of
leveraging operational and financial experience to position high
quality brands for accelerated but responsible growth. The
differentiated private equity fund takes a unique approach to
investing, applying operating expertise and leveraging its wide
network of franchisees, in addition to infusing capital in its
portfolio companies.
Important Information For Investors And
Stockholders
This communication does not constitute an offer
to buy or sell or the solicitation of an offer to buy or sell any
securities or a solicitation of any vote or approval. This
communication relates to a proposed transaction between Ruby
Tuesday, Inc. (“Ruby Tuesday”) and an affiliate of NRD Capital
Management, LLC (“Acquiror”). In connection with this proposed
transaction, Ruby Tuesday and/or Acquiror may file one or more
proxy statements, registration statements, proxy
statement/prospectus or other documents with the Securities and
Exchange Commission (the “SEC”). This communication is not a
substitute for any proxy statement, registration statement, proxy
statement/prospectus or other document Ruby Tuesday and/or Acquiror
may file with the SEC in connection with the proposed transaction.
INVESTORS AND SECURITY HOLDERS OF RUBY TUESDAY AND ACQUIROR ARE
URGED TO READ THE PROXY STATEMENT(S), REGISTRATION STATEMENT(S),
PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS THAT MAY BE FILED
WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Any definitive proxy statement(s) (if and when available) will be
mailed to stockholders of Ruby Tuesday and/or Acquiror, as
applicable. Investors and security holders will be able to obtain
free copies of these documents (if and when available) and other
documents filed with the SEC by Ruby Tuesday and/or Acquiror
through the website maintained by the SEC at http://www.sec.gov.
Copies of the documents filed with the SEC by Ruby Tuesday will be
available free of charge on Ruby Tuesday’s internet website at
http://www.rubytuesday.com or by contacting Ruby Tuesday’s Investor
Relations Director by email at RubyTuesdayIR@icrinc.com or by phone
at (646) 277-1273.
Participants in
Solicitation
Ruby Tuesday, Acquiror, their respective
directors and certain of their respective executive officers may be
considered participants in the solicitation of proxies in
connection with the proposed transaction. Information about the
directors and executive officers of Ruby Tuesday is set forth in
its Annual Report on Form 10-K for the fiscal year ended June 6,
2017, which was filed with the SEC on August 21, 2017 and amended
on October 4, 2017, certain of its Quarterly Reports on Form 10-Q
and certain of its Current Reports filed on Form 8-K.
These documents can be obtained free of charge
from the sources indicated above. Additional information regarding
the participants in the proxy solicitations and a description of
their direct and indirect interests, by security holdings or
otherwise, will be contained in the proxy statement/prospectus and
other relevant materials to be filed with the SEC when they become
available.
Forward Looking Statements
Certain statements in this communication
regarding the proposed transaction between Ruby Tuesday and
Acquiror are “forward-looking” statements. The words “anticipate,”
“believe,” “ensure,” “expect,” “if,” “intend,” “estimate,”
“probable,” “project,” “forecasts,” “predict,” “outlook,” “aim,”
“will,” “could,” “should,” “would,” “potential,” “may,” “might,”
“anticipate,” “likely” “plan,” “positioned,” “strategy,” and
similar expressions, and the negative thereof, are intended to
identify forward-looking statements. These forward-looking
statements, which are subject to risks, uncertainties and
assumptions about Ruby Tuesday and Acquiror, may include
projections of their respective future financial performance, their
respective anticipated growth strategies and anticipated trends in
their respective businesses. These statements are only predictions
based on current expectations and projections about future events.
There are important factors that could cause actual results, level
of activity, performance or achievements to differ materially from
the results, level of activity, performance or achievements
expressed or implied by the forward-looking statements, including
the risk factors set forth in Ruby Tuesday’s most recent report on
Form 10-K, Form 10-Q and other documents on file with the SEC and
the factors given below:
- failure of Acquiror to obtain the financing required to
consummate the proposed transaction;
- failure to obtain the approval of shareholders of Ruby Tuesday
in connection with the proposed transaction;
- the failure to consummate or delay in consummating the proposed
transaction for other reasons;
- the timing to consummate the proposed transaction;
- the risk that a condition to closing of the proposed
transaction may not be satisfied;
- the risk that a regulatory approval that may be required for
the proposed transaction is delayed, is not obtained, or is
obtained subject to conditions that are not anticipated;
- the diversion of management time to transaction-related
issues.
Ruby Tuesday’s forward-looking statements are
based on assumptions that Ruby Tuesday believes to be reasonable
but that may not prove to be accurate. Neither Ruby Tuesday nor
Acquiror can guarantee future results, level of activity,
performance or achievements. Moreover, neither Ruby Tuesday nor
Acquiror assumes responsibility for the accuracy and completeness
of any of these forward-looking statements. Ruby Tuesday and
Acquiror assume no obligation to update or revise any
forward-looking statements as a result of new information, future
events or otherwise, except as may be required by law. Readers are
cautioned not to place undue reliance on these forward-looking
statements that speak only as of the date hereof.
Contacts:
MediaICRChristine Beggan,
203-682-8329RubyTuesday@icrinc.com
Or
InvestorsICRMelissa Calandruccio, CFA,
646-277-1273RubyTuesdayIR@icrinc.com
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