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 York Post. (Reporting by Jessica Hall and Megan Davies; Editing by Carol Bishopric and Robert MacMillan)