Fidelity National Financial Inc., the largest U.S. title insurer, agreed to buy J. Alexander’s Corp. to expand a bet on U.S. restaurants and take its dining unit public.
Shareholders of J. Alexander’s may elect to receive $12 in cash per share, compared with the June 22 closing price of $9.90, in a deal that values the target company at about $72 million, Jacksonville, Florida-based Fidelity said today in a statement. J. Alexander’s investors may also opt to take a combination of cash and stock in the insurer’s restaurant subsidiary, to be named American Blue Ribbon Holdings Inc. and listed on the Nasdaq Stock Market or another exchange.
Fidelity Chairman William P. Foley II has been adding to restaurant holdings to gain scale after investing in Village Inn and Bakers Square in 2009 in a wager tied to distressed debt of a dining company. Foley announced an agreement in February to buy restaurant chain O’Charley’s Inc. in a deal that valued the company at more than $200 million.
“This transaction will provide significant benefits for our shareholders,” J. Alexander’s Chairman and Chief Executive Officer Lonnie J. Stout II said it a separate statement. “It not only rewards them with a cash premium for their existing shares, it offers them participation in the future business prospects of a much larger entity.”
The combined dining company will have more than 700 restaurants in 43 states with annual revenue of about $1.5 billion, according to the target company’s statement.
J. Alexander’s operates 33 restaurants and is based in Nashville, Tennessee. The company serves steaks, seafood, salad and desserts, according to the statement. Its stock has surged 58 percent this year through June 22. Fidelity jumped 19 percent.