Overland Park, KS: (Oct-11-07) The New Jersey Building Laborers Pension and Annuity Funds brought a class action lawsuit against Applebee's International Inc., over the proposed $1.9 billion sale of the restaurant operator to IHOP Corp. The union filed the class action in Delaware Chancery Court 10 days after the deal with IHOP was announced. The suit alleged that the transaction robbed Applebee's shareholders of financial benefits they might receive if Applebee's stayed independent and sold off its remaining company owned locations to franchisees. On July 16, 2007, IHOP, based in Glendale, CA, announced that it planned to buy the struggling Applebee's chain in a deal valued at $25.50 per share. Julia Stewart, IHOP's chief executive officer, has said she planned to pay for the transaction in part by selling most of the 508 company owned stores to franchisees and selling the real estate associated with the stores. Those moves would raise an estimated $950 million.
As part of a settlement reached, Applebee's International Inc. agreed to resolve the class action suit by providing its shareholders with additional information about the sale. The settlement won't include monetary payouts to the plaintiffs. [NEWS LEADER: APPLEBEE'S SHAREHOLDERS]