Darden to Buy Rare Hospitality for $1.19 Billion
Darden shares rose 16 cents Thursday to close at $39.96 on the New York Stock Exchange.
Darden said it would buy all of the company's outstanding shares in a tender offer with a price of $38.15 per share. The price is a 39 percent premium to Rare's closing price Thursday of $27.51. The deal value is based on 31.1 million shares outstanding.
Darden valued the deal at $1.4 billion, which includes outstanding debt and capital lease obligations.
Rare owns and operates 317 restaurants, including 287 LongHorn Steakhouse restaurants and 28 Capital Grille restaurants.
Darden said it would finance the deal through cash, a new $1.2 billion senior interim credit facility and a $700 million senior revolving credit facility.
The restaurant operator said the acquisition would be "neutral" to its earnings in 2008, excluding one-time transaction and integration costs.
Darden and Rare's boards both have already approved the deal. The tender offer is expected to close in October.