CKE Restaurants, Inc.

Summary of Case:

A securities class action has been filed against CKE Restaurants, Inc. (CKR) ("CKE" or the "Company") on behalf of all securities purchasers of CKE Common Stock, in the Delaware Chancery Court.

The claims arise out of the proposed acquisition of CKE by private equity firm THL (the "Proposed Transaction"). According to the complaint, on February 26, 2009, CKE and THL publicly disclosed that they had entered into a definitive merger agreement (the "Merger Agreement") under which THL will acquire CKE for approximately $928 million,  including the assumption of approximately $309 million of debt. Pursuant to the terms of the Merger Agreement, CKE's public shareholders will receive merely $11.05 in cash for each share of CKE common stock held (the "Merger Price"). 

The complaint alleges that The Merger Price substantially undervalues CKE, which is hailed as the "quintessential American success story," particularly because CKE is perfectly poised for growth and windfalls as a result of recently-executed strategic development agreements. The Merger Price is also unfair and inadequate given that: (a) CKE's stock vaulted on news of the Proposed Transaction, rising 28 percent to close above the Merger Price at $11.37 per share on February 26, 2010; (b) CKE's stock price traded as high as $11.52 per share as recently as September 17, 2009; and (c) at least one analyst has set a target price for CKE stock at $15.00 per share.

The complaint further alleges that the Proposed Transaction is designed to benefit CKE's insiders to the  detriment of Plaintiff and the Class. Certain of the Director Defendants (defined below) have also recently amended their employment agreements to benefit from Proposed Transaction's closing. These Defendants will also likely get a second bite at the apple, allowing the potential for management to not only profit from the sale of their equity (including exercised options) in the going private transaction itself, but from future stock appreciation through options they are likely to be granted by private equity buyer THL. 

If you purchased this company's shares during the Class Period and suffered a loss or for further information about the case, please review the links below.