SAN DIEGO – Jack in the Box Inc., one of the United States’ largest hamburger chains with more than 2,200 restaurants in 21 states and Guam, is exploring strategic and financing alternatives to maximize shareholder value.
The San Diego-based company’s board of directors on Dec. 17 said potential alternatives may include a sale of the company or executing on its previously announced plans to increase leverage.
Jack in the Box said it has had discussions with potential buyers but added that there can be no assurance that the exploration of strategic and financing alternatives will result in a transaction.
“That said, in the absence of a strategic transaction the company remains committed to its previously communicated plan to have a new capital structure in place by the end of the first half of fiscal 2019,” Jack in the Box said. “That capital structure could include, among other things, a securitization or bond issuance.”
The company has not set a timetable for the conclusion of the review process and said no further comments will be made on the process until further disclosure “is appropriate or required by law.”
Net income at Jack in the Box in the year ended Sept. 30 totaled $121,371,000, equal to $4.26 per share on the common stock, down 11 percent from $135,332,000, or $4.42 per share, in fiscal 2017. Revenues fell 21 percent to $869,690,000 from $1,097,291,000.
Shares of Jack in the Box increased nearly 5 percent in premarket trading on Dec. 17 after closing at $80.33 on Dec. 14.
The potential for a Jack in the Box sale would continue a trend of major merger and acquisition movement in the quick-service restaurant segment. In September, Inspire Brands, which owns Arby’s and Buffalo Wild Wings, acquired Sonic Drive-In for approximately $2.3 billion. Inspire, backed by Roark Capital, had earlier in the year acquired Buffalo Wild Wings for $2.9 billion. Meanwhile, private equity firm Apollo Global Management LLC acquired Qdoba from Jack in the Box earlier this spring.