Back Yard Burgers Issues Statement Regarding Letter From BBAC, LLC
August 28 2006 - 5:57PM
Business Wire
Back Yard Burgers, Inc. (NASDAQ:BYBI) (the "Company") announced
today that it has received a letter dated August 24, 2006, from
BBAC, LLC ("BBAC") expressing a desire to acquire all of the
Company's common stock for $6.10 per share, subject to due
diligence, financing and other conditions stated in the letter. The
August 24 letter was sent as a follow-up to a letter to the Board
dated April 28, 2006, which contained a similar proposal from
Cherokee Advisors, LLC ("Cherokee Advisors"). Cherokee Advisors and
BBAC are affiliated with Reid Zeising. On June 7, 2006, the Company
announced that it decided not to pursue the proposal contained in
the April 28 letter, principally because of Cherokee Advisors'
failure over a period of months to carry through with its stated
desire to negotiate a merger agreement by, among other things,
refusing to sign a customary confidentiality agreement as a
condition to the negotiation. The Board also based its decision on
Cherokee Advisors' failure to substantiate that it had sufficient
assets and funding necessary to perform its obligations under any
merger agreement and fund the proposed transaction. After June 7,
2006, and prior to receipt of the letter dated August 24, 2006, the
Board had informal discussions with Mr. Zeising on several
occasions regarding a possible acquisition of the Company by
Cherokee Advisors and BBAC. On August 8, 2006, the Company retained
Morgan Keegan & Company, Inc. to, among other things, advise
the Board with respect to, and assist the Board in analyzing
proposals to acquire the Company from potential acquirers,
including Cherokee Advisors and BBAC. On August 28, 2006, the Board
of Directors of the Company met to review the most recent proposal
from BBAC. After careful consideration of the terms included in the
letter dated August 24, 2006, and draft confidentiality agreement,
the Board, in consultation with its legal and financial advisors,
determined that the terms of the proposed confidentiality agreement
were not acceptable and decided not to move forward with further
negotiations with Cherokee Advisors or BBAC at this time unless,
among other things, Cherokee Advisors and BBAC entered into a
customary confidentiality agreement on terms acceptable to the
Board. The Board did not review the substantive terms of the
proposal from BBAC or make any determination whether the proposed
offering price of $6.10 per share was fair to shareholders of the
Company. The Board will continue to review any proposals from
Cherokee and BBAC in accordance with its fiduciary duties. Back
Yard Burgers operates and franchises quick-service restaurants in
21 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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