No fewer than six firms courted Bojangles’ Inc. before the company entered a deal to sell the company for $593 million to Durational Capital Management and The Jordan Co. in November 2018, according to a Securities and Exchange Commission filing.
The filing shows that Durational was not the first — or the highest — bidder on the Charlotte-based chicken-and-biscuit company.
Durational’s all-cash acquisition of Bojangles’, announced Nov. 6, will provide stockholders with $16.10 per share. According to the deal, expected to close in the first quarter of 2019, Bojangles’ will continue to operate as an independent and privately held company, with its headquarters remaining in Charlotte.
Bojangles’ began acquisition discussions with one multinational corporation as early as January 2018, according to the filing. In February, however, the Bojangles’ board informed its first suitor that it was not for sale.
Around the same time, the Bojangles’ board established a subcommittee to evaluate possible transactions with interested firms.
Another unsolicited offer came the company’s way in March, this time from a private equity investment firm, with a non-binding indication of interest pricing the company at a range of $14.50 to $16.00 per share. Bojangles’ stock price at the time of the offer was $13.40.
Takeover talks with Durational didn’t begin until April, the filing states. A preliminary valuation by Durational priced the company at $17.50 per share. Bojangles’ stock price at the time of the offer was $15.45.
In mid-August, Bank of America Merrill Lynch, hired by Bojangles’ to evaluate offers, approached 23 parties to gauge respective interest in a Bojangles’ deal. The company negotiated a total of 22 confidentiality agreements from such discussions and, throughout August and early September, the list was narrowed to 19 parties, excluding Durational.
After reviewing financial information from Bojangles’, Durational cut its previous valuation to $15.50 per share. Bojangles’ initially rejected this offer, the filing stated.
The company received higher offers from previous bidders — including an offer from one multinational corporation for a per share price range of $17 to $19 — but in September and October, interested firms dropped out one by one. The last one standing was an investment fund that Bank of America Merrill Lynch found “unlikely to be able to raise the funds necessary” to acquire the company, the filing stated.
In mid-October, Bojangles’ reached back out to Durational and The Jordan Co. The firms submitted a revised valuation of $16.10 per share. The companies finalized details and announced the acquisition agreement on Nov. 6.
The filing also detailed on the risks and certainties associated with Bojangles’ remaining a standalone company, including the company’s open CEO position, the ability of the company to expand its franchise system and its viability as an independent public company.
“In consultation with our outside advisors, the board of directors has been evaluating several strategic alternatives over the last several months,” said William Kussell, director and non-executive chairman of the board, in the release announcing the deal. “We are confident that this agreement offers a promising opportunity to realize the highest value for our stockholders while providing a strong path forward for the Bojangles’ brand, its employees, franchisees, and loyal customers.”
