Funds controlled by Bain Capital Partners and Catterton Management Co. have been targeting the casual dining chain since last autumn, among a legion of private money sources enticing public shareholders to cash out. Vehicles known as Kangaroo Acquisition Inc. and Kangaroo Holdings Inc. would join forces with senior managers and founders from OSI, the purveyor of Outback Steakhouse and such brands as Carrabba's Italian Grill, Lee Roy Selmon's, Cheeseburger in Paradise and the Bonefish Grill.
In addition to eateries in all 50 US states, with some 1,400 restaurants in total, the conglomerate has been beefing up its overseas presence, operating Outback Steakhouses, Fleming's Prime Steakhouse & Wine Bars and Blue Coral Seafood & Spirits in 20 countries.
Under an amended agreement blessed by OSI's board of directors, the $40 per-share mark would still apply to the founders who are taking up with the Kangaroos. Chairman Chris Sullivan, Vice Chair Robert Basham and CEO A. William Allen III each would exchange shares of OSI common stock for the Kangaroo Holdings variety at the $40 rate.
According to one analysis, the revised bid for other shareholders represents a 27% premium over the price of an OSI share the day prior to the merger announcement on November 3, 2006. OSI further has agreed not to pay its regular quarterly cash dividend prior to the closing of the merger or termination of the merger agreement, officials said.
Financial food forays are nothing new to Bain Capital, a Boston-based private equity manager that has previously invested in Domino's Pizza, Burger King and Dunkin' Donuts. Catterton Management has embraced such dining concepts as P.F. Chang's China Bistro, Baja Fresh Mexican Grill and First Watch Restaurants. The pending OSI vote next week would be the third attempt by Bain and Catterton to win a shareholder majority for the takeover, with two previous dates postponed when it appeared there was not enough backing.
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