* California Pizza hired Moelis in April
* Shares of California Pizza gained 9.6 percent
(Adds background on restaurants and deals)
PHILADELPHIA/NEW YORK, July 28 Private equity
firm American Securities is bidding for California Pizza
Kitchen Inc CPKI.O, two people familiar with the situation
The 25-year-old restaurant chain, which has a market
capitalization of more than $400 million, said in April that it
hired investment bank Moelis & Co as its exclusive financial
adviser to consider changes in its capital structure, a
possible sale or other combination.
Neither American Securities and California Pizza were
immediately available for comment.
Earlier this month, the company, which offers unusual items
like Korean barbecue steak tacos and pear and gorgonzola
pizzas, raised its second-quarter earnings forecast as sales at
established restaurants fell less than expected.
Private equity firms were seen as the most likely bidders
since no restaurant rivals were seen as a good fit, analysts
said at the time. Another private equity firm, Harvest, was
eyeing California Pizza, one source said, although the level of
its interest was unclear.
Shares of California Pizza hit an intraday high of $20
before closing at $18.38, up $1.61, or 9.6 percent.
Buyout deals have spiked in recent months with assets
changing hands as funds face pressure to spend capital raised
in the boom and are nervous about the threat of higher taxes.
Private equity firms have incentives buy and sell right
now. Pressure is on to invest billions of dollars raised in
2006 to 2008 as the end of those funds' investment periods
approach, while funds want to sell or take public existing
investments to reward investors.
Among recent transactions are BC Partners' [BCPRT.UL] and
Silver Lake Partners' [SILAK.UL] $3.1 billion deal to buy
healthcare services firm MultiPlan from two other buyout shops,
and Carlyle's [CYL.UL] $3.8 billion deal to buy nutritional
supplements maker NBTY Inc NTY.N.
Dealmaking in restaurants has been growing again with a
recovery in consumer spending and more available capital.
Casual dining, which includes full-service restaurants like
California Pizza Kitchen, struck a low point in July 2009
because of the economic downturn, but has begun to recover.
In April, CKE Restaurants Inc CKR.N, the owner of
Hardee's and Carl's Jr fast-food chains, last week accepted a
$694 million bid from Apollo Management [APOLO.UL] .
That deal followed the sale of Brinker International Inc's
(EAT.N) On the Border Mexican Grill & Cantina to an affiliate
of Golden Gate Capital, and Papa Murphy's sale to private
equity firm Lee Equity Partners.
American Securities' interest was first reported by the New
(Reporting by Jessica Hall and Megan Davies; Editing by Carol
Bishopric and Robert MacMillan)
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