Golden Gate Buys Macaroni Grill At A Big Discount

CHICAGO (Reuters) – Brinker International Inc (EAT.N) said on Friday it completed the sale of a majority stake in its Romano’s Macaroni Grill business, helping to send the restaurant operator’s shares up nearly 28 percent.

The final sale price for buyer Golden Gate Capital was nearly 40 percent less than the figure first announced in August. But given the tight credit markets and global market turmoil since then, investors were happy the deal was completed at all.

“There’s some relief that they closed this deal considering the state of the economy and the financial turmoil out there,” Morningstar analyst John Owens said.

A better-than-expected quarterly profit and full-year forecast from rival Darden Restaurants Inc (DRI.N) ([ID:nN19443256]) also aided the stock rally.

The final purchase price was $88 million, compared with $131.5 million announced in August.

The lower purchase price reflected conditions in the credit and stock prices as well as slightly less real estate being included in the sale, he said.

Brinker, which also owns the Chili’s Grill & Bar and Maggiano’s Little Italy chains, will receive total cash proceeds of $130 million to $135 million due to tax benefits and other items, said Guy Constant, Brinker senior vice president of finance.

Brinker, whose affiliates retained a 19.9 percent stake in Romano’s, plans to use the funds to pay down debt.

Its shares jumped $2.37 to $10.97 on the New York Stock Exchange, outperforming Darden’s 14.5 percent rise.

Brinker plans to record pretax charges in the range of $35 million to $40 million from the deal in its fiscal second quarter, which began Sept. 25.

(Reporting by Brad Dorfman, editing by Gerald E. McCormick and Jeffrey Benkoe)

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