Applebee's Receives Preliminary Takeover Offers

Applebee's International, which has been under pressure from activist investors to increase shareholder value, said on Thursday it has received several preliminary nonbinding proposals to buy the casual dining chain operator.

The company also said it has agreed to appoint former Securities and Exchange Commission Chairman Richard Breeden and another Breeden Capital Management nominee to its board of directors in a settlement of a proxy fight over board seats.

Applebee's said it will begin a second round of due diligence with bidders before taking final offers. It also said that it is continuing to evaluate a recapitalization.

It is reviewing its returns on capital, the mix of company-owned versus franchised restaurants, overhead costs and strategies for improving same-store sales, it said.

It said it has been working with Lehman Brothers and Banc of America Securities to explore a securitization of the company's royalty income stream and other assets. The securitization could be used in either the recapitalization or by a potential buyer, it said.

The company said it was too early to comment on the likelihood or value of a recapitalization or a sale, saying there was no guarantee a transaction would occur.

Appebee's in February said it was exploring strategic alternatives including a possible sale as the company came under pressure from Breeden. The company has been hurt by a pullback in consumer spending and increased competition from other bar-and-grill style restaurants.