Ruby Tuesday Pops 18% After Agreeing to Be Acquired

10/17/17

By Daniel Miller, MotleyFool

IMAGE SOURCE: GETTY IMAGES.

What happened?

The struggling restaurant chain, Ruby Tuesday (NYSE:RT), announced two major things Monday when it released its first-quarter fiscal 2018 financial results and also said it would be acquired by a private equity firm. The stock popped 18% higher as the stock inched closer to the agreed $2.40 purchase price per share.

So what

The agreement calls for NRD Capital, an Atlanta-based private equity firm, to acquire all of Ruby Tuesday's common stock for $2.40 per share in cash. NRD will assume or retire all debt obligations for roughly $335 million. Ruby Tuesday dropped the announcement on the same day it reported total revenue declined 15.3% during the first quarter of fiscal 2018; its adjusted net loss was $0.01 per diluted share.

Said Stephen Sadove, Non-executive Chairman of Ruby Tuesday, in a press release:

The Board of Directors and our advisors have thoroughly evaluated all options available to the Company and are confident that this agreement will provide the most promising opportunity to realize the highest value for our stockholders while providing the best path forward for the Ruby Tuesday brand, its employees, franchisees, and loyal customers. ... NRD Capital has a distinguished track record of achieving and maintaining profitable growth for restaurant concepts and will be an excellent partner to lead Ruby Tuesday going forward.

Now what

There's not much else to see here, and Ruby Tuesday's public story is about over. Investors can at least take some solace in the fact that the $2.40 purchase price is a premium of about 37% to its closing price on March 13, 2017, a day prior to management announcing the desire to seek "strategic alternatives."

Say Goodbye to the Old iPhone: This Could Be 40X BetteriPhone mania is back, and there's potentially billions up for grabs. But if you think Apple is the best way to play the pending iPhone tsunami, think again. One tiny company holds the patents to an invaluable, tiny component inside Apple's newest iPhone -- and Apple has to pay up every time it puts this technology in its phones.

Don't wait until the name of this company is on everyone's lips.

It's on us. Share your news here.

Submit your stories and articles to citybizlist today.