IHOP Corp., the biggest U.S. pancake-house chain, offered to buy Applebee’s International Inc., people familiar with the matter said.
The bid was more than $2 billion, a person with direct knowledge of the offer said. There may be other bidders, said the people, who declined to be identified because the proposal isn’t public. Applebee’s stock-market value is about $1.92 billion.
IHOP, which has about 1,300 locations and half the market value of Applebee’s, said in February it may acquire a chain that isn’t a competitor. Applebee’s, with 1,900 casual-dining restaurants, began seeking a buyer after shareholder Breeden Capital Management LLC nominated four board candidates in December and called the stock’s performance a “disaster.”
Applebee’s “is in the middle of a transition,” Malcolm Knapp, a New York-based restaurant consultant, said Wednesday. “It’s going to take a lot of work.”
Applebee’s stock declined 4.1 percent in the three years that ended Feb. 12, the day before it said it may sell itself. Darden Restaurants Inc., owner of the Olive Garden and Red Lobster chains, rose 86 percent during that time, while California Pizza Kitchen Inc., with about 200 restaurants, almost doubled.
