(Reuters) – Japanese-style restaurant chain Benihana Inc (BNHN.O) (BNHNA.O) got a takeover offer from RDG Capital that values the company at around $150 million including debt, a source familiar with the situation said.
The offer of $7 a share values the Miami, Florida-based company at more than $100 million. Including debt and preferred shares, that comes to around $150 million, the source said.
Shares of the Miami-based chain rose as much as 14 percent, before paring some of those gains. The company’s common stock was trading up 6 percent at $6.22, while its Class A shares were up more than 7 percent at $6.00 Tuesday afternoon on Nasdaq.
“It is an interesting offer, but I think it will likely be rejected by the company,” KeyBanc Capital Markets analyst Brad Ludington said.
He said the deal represented a steep discount to Benihana’s replacement value, which he estimated at about $360 million.
A replacement value tries to calculate what it would cost the buyer to duplicate the target company’s infrastructure and operations.
The company had rebuffed an earlier approach from RDG, whose founder, Russell Glass, worked with Carl Icahn as president and chief investment officer of Icahn Associates Corp.
RDG then made a more formal offer with a specific price, the source said. Benihana has formed a special committee to evaluate alternatives, the source said.
In February, Benihana shareholders voted in favor of a merger of Benihana and its wholly owned subsidiary BHI Mergersub, which proposed to increase the company’s Class A common stock by 12.5 million.
Benihana, which runs teppanyaki and sushi restaurants, was founded by Japanese-born Rocky Aoki in 1964 and went public in 1983.
The New York Post earlier reported RDG’s approach. Benihana declined comment. (Additional reporting by Amulya Nagaraj in Bangalore) (Reporting by Megan Davies in New York and Renju Jose in Bangalore; Editing by Robert MacMillan, Anthony Kurian)