Soliman Raises Bid for Restaurant Associates, Details Takeover Plan

A New York restaurant company, which has accepted a management buyout offer, said Thursday that Orange County businessman Anwar Soliman has raised the price of his competing bid for the firm.

Restaurant Associates Industries said Soliman has raised his offering price for the company to $20 per share, or about $120 million. The management group is offering $18 a share.

And, for the first time, Soliman’s new offer spells out plans for gaining control of the corporation in the face of an apparently hostile management, said Kurt Koegler, an attorney for Restaurant Associates.

Koegler, who represents a committee of directors assigned to evaluate offers for the New York-based restaurant and newsstand company, said Soliman’s latest proposal also is “a little more concrete” than his previous bid of $19 per share.

Koegler said he received Soliman’s proposal Wednesday evening. On Thursday, a Restaurant Associates management group that owns about 37% of the company’s Class B stock and 13.5% of its Class A shares launched an $18-per-share cash tender offer for the remaining 2.1 million shares of Class A stock and 2.9 million shares of Class B stock outstanding. The Class A shares carry only 1/10 of a vote.

Restaurant Associates’ board of directors, at the recommendation of the evaluation committee, earlier had recommended the management group’s offer over Soliman’s $19-per share bid. But, Koegler said, “the committee retained the right to change its recommendation if circumstances changed.”

In his latest offer, Soliman said he would pay $2 million for an option to purchase from the company 1 million newly issued shares of Class B common stock and said he would purchase even more if necessary to obtain a 51% stake in the company. Currently, the management group has about 48% of Restaurant Associates’ voting rights.

Bid ‘Filled’ With Contingencies

Soliman said Thursday that obtaining the options would be a way to “free the hostages,” a term he used to describe the shareholders outside the management group.

Martin Brody, Restaurant Associates’ chairman and chief executive and part of the management group vying to buy the company, denied Thursday that Soliman’s bid has grown any stronger. He said it is still filled with contingencies.

But Koegler said that while the management group’s proposal seemed more achievable in the past, Soliman’s latest bid, although still partly unclear, “is a little more concrete” than his earlier offer.

Soliman’s proposal is subject to a number of conditions, including obtaining approval from the board of Restaurant Associates, a due-diligence review and obtaining financing, according to a statement released Thursday by Restaurant Associates.

Koegler said Restaurant Associates’ evaluation committee will meet to consider the new Soliman offer but said no date has been set for that meeting. Under the federal securities law, he said, Restaurant Associates’ shareholders cannot act on management’s tender offer for 20 business days.