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UPDATE 1-IHOP says to buy Applebee's for $2.1 billion

(Adds details)

NEW YORK, July 16 (Reuters) - Pancake restaurant IHOP Corp. IHP.N plans to buy Applebee's International Inc. APPB.O for $25.50 per share, the companies said on Monday.

The companies said the deal was worth $2.1 billion. Based on the number of outstanding shares in Applebee’s latest quarterly filing, the deal would be worth $1.9 billion.

Excluding charges related to the acquisition, IHOP expects the transaction to add to earnings beginning in 2008.

IHOP, which franchises almost all of its restaurants, said it believes it can re-energize Applebee’s by franchising a substantial majority of Applebee’s 508 company-operated restaurants.

IHOP said it expects to realize significant cost savings as a result.

Greenhill & Co. LLC advised IHOP, and Banc of America Securities LLC advised Applebee’s on the deal.

((Reporting by Martinne Geller; Reuters messaging:;; +1 646 223 6023))

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