Applebee's moves preliminary proposals to due diligence discussions

By Lisa Kerner

Charlotte, N.C., April 25 - Several non-binding preliminary proposals to acquire the company have resulted from Applebee's International, Inc. strategic process.

The board of directors and the strategic committee have approved entering a second round of detailed due diligence discussions before asking potential buyers to submit definitive, binding proposals, a company news release stated.

Also, the strategy committee and its financial adviser, Citigroup Global Markets Inc., continue to evaluate a possible recapitalization of Applebee's as they review returns on capital, the mix of company-owned versus franchised restaurants, overhead cost structure and ways to improve same-store sales.

Lehman Brothers Inc. and Banc of America Securities LLC have assisted in exploring a securitization of the company's royalty income stream and other assets through the recapitalization or a potential sale.

The Overland Park, Kan., company develops, franchises and operates restaurants under the Applebee's Neighborhood Grill & Bar brand.

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