UPDATE
We have renewed our investigation into the fairness of the price of $9.55 per share in cash for which Carrols Restaurant Group, Inc. (Nasdaq: TAST) (“Carrols”) has agreed to be sold to Restaurant Brands International Inc. (“RBI”), the parent company of Burger King, upon the approval of a Special Committee of the Carrols Board of Directors.
We renewed our investigation on March 4, 2024, after reviewing the preliminary proxy (“Proxy”) filed by Carrols with the Securities and Exchange Commission concerning the proposed sale.
Carrols is the largest Burger King franchisee in the United States. According to the Proxy, affiliates of RBI and Burger King own 100% of Carrols Series D Convertible Preferred Stock, which is presently convertible into 9,414,580 shares of Carrols common stock, or 14.6% of Carrols outstanding common shares as of March 1, 2024.
These affiliates have special rights, including the right to elect two members of the Carrols board of directors, and to approve any merger or engaging in any business other than the ownership and operation of Burger King and Popeyes restaurants.
According to the Proxy, one of the factors cited by the Special Committee of the Carrols Board for approving the sale is that RBI’s consent, as franchisor, would be required in order for Carrols to acquire additional Burger King franchise locations and there is a likelihood that RBI may not permit Carrols to acquire a significant number of additional Burger King franchise locations, which the Special Committee believed would limit Carrols’ growth prospects.
This factor raises a concern as to whether any coercion caused the Special Committee to recommend the proposed sale at a sub-optimal price.
“We are investigating whether the Special Committee of the Carrols Board of Directors acted in the best interests of Carrols shareholders in approving the sale,” explained Joshua Fruchter, a founding partner of Wohl & Fruchter. “This includes whether there was any coercion, as well as whether all material information regarding the transaction has been fully disclosed.”
Notably, according to TipRanks, the sales price agreed upon is below the pre-announcement price targets of $10.00 per share of two analysts: Joshua Long at Stephens, and Jake Bartlett of Truist Financial.
ORIGINAL ANNOUNCEMENT
We are investigating the fairness of the price of $9.55 per share in cash for which Carrols Restaurant Group, Inc. (Nasdaq: TAST) (“Carrols”) has agreed to be sold to Burger King parent Restaurant Brands International Inc. (“RBI”).
The sales price is below the price targets of $10.00 per share of two analysts: Joshua Long at Stephens, and Jake Bartlett of Truist Financial, according to TipRanks.
If you remain a Carrols shareholder and question the fairness of the price, you may contact our firm to discuss your legal rights at no charge by completing and submitting the form below.
Why is there an investigation?
On January 16, 2024, Carrols announced that it had agreed to be sold to RBI for $9.55 per share in cash.
“We are investigating whether the Carrols Board of Directors acted in the best interests of Carrols shareholders in approving the sale,” explained Joshua Fruchter, a founding partner of Wohl & Fruchter. “This includes whether the price agreed upon is fair to Carrols shareholders, as well as whether all material information regarding the transaction has been fully disclosed.”
Notably, according to TipRanks, the sales price below the price targets of $10.00 per share of two analysts: Joshua Long at Stephens, and Jake Bartlett of Truist Financial.