Back Yard Burgers Acknowledges Receipt of Letter from Cherokee Advisors, LLC
June 09 2006 - 5:30PM
Business Wire
Back Yard Burgers, Inc. (NASDAQ: BYBI) today confirmed that the
Board of Directors of Back Yard Burgers received a letter from
Cherokee Advisors, LLC dated April 28, 2006, expressing an interest
in acquiring Back Yard Burgers. Based on the Board's evaluation of
the proposal, on May 18, 2006, the Board determined that pursuing
the proposal was not in the best interests of Back Yard Burgers or
its stockholders. The Board's determination was based, in part, on
Cherokee Advisors' failure to substantiate in a form acceptable to
the Board that Cherokee Advisors had sufficient capital and funding
necessary to perform its obligations under a merger agreement and
fund the proposed transaction. The Board also based its decision on
Cherokee Advisors' failure over a period of many weeks to execute a
customary confidentiality agreement, which the Board required as a
condition to the negotiation of a merger agreement. "In reviewing
Cherokee's letter of April 28, 2006, the Board was concerned that
the timing of Cherokee's proposal could disrupt the Board's plans
to retain a new CEO," said Back Yard Burgers Chairman Lattimore M.
Michael. "Our initial concerns about the timing of Cherokee's
proposal are heightened by the proximity of Cherokee's SEC filing
on June 5, 2006, to our annual franchisee meeting next week," Mr.
Michael continued. The Board of Directors will continue to review
any proposals from Cherokee Advisors in accordance with its
fiduciary duties. Back Yard Burgers operates and franchises
quick-service restaurants in 20 states, primarily in markets
throughout the Southeast region of the United States. The
restaurants specialize in charbroiled, freshly prepared,
great-tasting food. As its name implies, Back Yard Burgers strives
to offer the same high-quality ingredients and special care
typified by outdoor grilling in the backyard. Its menu features
made-to-order gourmet Black Angus hamburgers and chicken sandwiches
- charbroiled over an open flame, fresh salads, chili and other
specialty items, including hand-dipped milkshakes, fresh-made
lemonade and fresh-baked cobblers.
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