Chanticleer Holdings puts hooters deal on hold

[rkbabang]

I ran across this story today:

 

Hooters Casino teeters toward default, possible bankruptcy

 

"... Chanticleer Holdings Inc., which also has an interest in Hooters America (which controls the larger 440-store chain), also put on hold a separate deal to acquire 45 Hooters franchise stores in Texas.

 

"Since the credit crisis hit, we have been unable to get financing," said Mike Pruitt, chief executive of Chanticleer Holdings Inc. "But the contract is still valid when the markets loosen up." ..."

 

--Eric

[Parsad]

Hi Rk,

 

That's been on hold for a few months now...they are going quarter by quarter and seeing how the credit markets are.  The three parties still want to consummate the deal, and they are under contract, but spreads are just so wide that financing is very, very expensive.  A few months earlier and this deal would have closed with no problem.  Until credit markets start to loosen, financing is not cost-effective.  Cheers!

[OracleofCarolina]

Noticed in Chanticleer's recent 10-q that the Hooters

acquisition is officially dead, well at least

they still have the S African restaurants

[Parsad]

Yup, looks like the Hooters Inc deal is dead.  No news anywhere on what is happening with HOA.  There were media articles discussing that HOA would have to be sold or seek an equity partner, but nothing yet.  Chanticleer still has the right of first refusal in any HOA deal. 

 

Also, the SA restaurants are held within the Dine Out company trading on the Frankfurt exchange.  The value of the shares owned by Chanticleer would worth somewhere around $4M.  Don't know who is paying those prices for those shares, but they are getting it, as it looks like they are selling small portions...in total 6% sold according to the latest 10-Q.  Cheers!

[OracleofCarolina]

Sanjeev,

The $5 million note is due in november.

Is Chanticleer getting the cash or the Hooter stock?

Does HOA have the cash?

[Parsad]

Don't know.  I think HOA has more than enough cash flow to pay back the $5M, but they may want to extend it out again.  We'll have to wait and see.  Cheers!

[OracleofCarolina]

It is not the easiest company to place a value on

[Carvel46]

Parsad: How can I pull up info on Dine Out in Frankfurt?

 

 

 

[Parsad]

Dine Out's info is primarily in Chanticleer's 10-Q's and 10-K.  It's just the holding company for Shaw Ppty's and Chanticleer's interest in the South African Hooter's restaurants, but trades on the Frankfurt exchange.  You can go to Yahoo.com's finance site and get a quote on it.  Like I said, I have no idea who would buy Dine Out's shares at current prices, but there are people out there buying, and it would give Chanticleer's interest alone a paper valuation of over $5M.  Cheers!