CPK Soldiers On after American Securities Pulls Out

Just a short update on the California Pizza Kitchen auction:

peHUB has confirmed that American Securities Capital has indeed pulled out of the CPK sale. Yes, I am late on this one. Last week, the NY Post reported that American Securities walked away from the auction after being in advanced talks. This came after the paper first reported that the CPK sales process was on and then off and then on. So I thought we needed clarity.

It’s not clear if any other party is vying for CPK but at least we know American Securities is out. Harvest Partners was rumored at one point to be interested.

Why American Securities walked away is also not immediately known. I’m told that there is still a disconnect between restaurant buyers and sellers on price. Restaurants are showing rebounding same store sales but any improvements are modest, a source says.

“Some of these sale processes are working and some are failing because the multiples buyers are willing to pay don’t meet seller’s expectations,” the source says.

CPK, when it announced second quarter earnings last week, said it would continue to explore strategic alternatives. CPK also showed improved results. The restaurant chain reported second quarter net income of $4.2 million, or 17 cents a share, for the quarter ended July 4, down from $6.1 million or 25 cents a year earlier.  Analysts had expected 16 cents a share.

Same store sale in the current quarter are also off 0.9,% compared to a 5.9% drop in second quarter.

Officials for CPK and American Securities couldn’t be reached for comment.