CKE Restaurants announced that it will repurchase more than 4 million shares of its stock, or 6.1 percent of the total outstanding, that are now owned by hedge fund Pirate Capital.
The company — best known for its Carl’s Jr., Hardee’s, and La Salsa Fresh Mexican Grill restaurant brands — will pay $18.97 per share, the closing price on April 2. This would suggest CKE is not paying greenmail.
Altogether, the company is shelling out $77.3 million, which will be financed with its revolving credit facility.
“We are very pleased to be able to take advantage of this opportunity to increase shareholder value,” said CKE president and chief executive officer Andrew F. Puzder, in a statement.
Pirate and its investors must be pleased, too. The hedge fund paid less than $14 per share for the bulk of its stake, from December 2005 through January 2006.