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Deal returns Steak n Shake to steakhouse biz

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The Steak n Shake Co.’s announcement this morning that it plans to purchase Western Sizzlin Corp. for about $23 million puts the Indianapolis restaurant company back in the steakhouse business for the first time since exiting it nearly a decade ago.

In 2000, the company — then known as Consolidated Products Inc. — sold off its 11 Colorado Steakhouses in order to focus on its core Steak n Shake business.

But the company’s strategy has shifted dramatically since Texas hedge fund manager Sardar Biglari took the helm last year. Biglari, 31, serves as president and CEO of both Steak n Shake and Western Sizzlin, a Roanoke, Va.-based franchiser of budget steak restaurants.

In an announcement this morning, Steak n Shake said it has signed a letter of intent for the acquisition. Both companies said terms were negotiated between special board committees made up entirely of independent directors.

Western Sizzlin already was a major Steak n Shake stockholder, with more than 1.5 million shares, according to a regulatory filing. Under the deal, that stock would be transferred directly to Western Sizzlin shareholders. Steak n Shake also plans to issue Western Sizzlin shareholder bonds paying 14 percent interest for five years. The Indianapolis company has the right to pay off the bonds after one year without penalty.

The joint statement did not elaborate on the strategy behind the acquisition, and Steak n Shake officials did not respond to requests for comment before IBJ Daily’s deadline.

Steak n Shake is the far larger company, with a stock market value of $320 million and 486 restaurants. Most Steak n Shake restaurants are company-owned and none are farther west than Texas. Western Sizzlin has about 100 restaurants, nearly all franchised. They’re in the Midwest, East, South and in California.

Neither company’s stock moved dramatically after the announcement. Steak n Shake shares late this morning were fetching $10.98, down 1.7 percent on the day. Western Sizzlin shares were trading at $13, up 1.96 percent.
 

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  1. If what you stated is true, then this article is entirely inaccurate. "State sells bonds" is same as "State borrows money". Supposedly the company will "pay for them". But since we are paying the company, we are still paying for this road with borrowed money, even though the state has $2 billion in the bank.

  2. Andrew hit the nail on the head. AMTRAK provides terrible service and that is why the state has found a contractor to improve the service. More trips, on-time performance, better times, cleanliness and adequate or better restrooms. WI-FI and food service will also be provided. Transit from outlying areas will also be provided. I wouldn't take it the way it is but with the above services and marketing of the service,ridership will improve and more folks will explore Indy and may even want to move here.

  3. They could take the property using eminent domain and save money by not paying the church or building a soccer field and a new driveway. Ctrwd has monthly meetings open to all customers of the district. The meetings are listed and if the customers really cared that much they would show. Ctrwd works hard in every way they can to make sure the customer is put first. Overflows damage the surrounding environment and cost a lot of money every year. There have been many upgrades done through the years to help not send flow to Carmel. Even with the upgrades ctrwd cannot always keep up. I understand how a storage tank could be an eye sore, but has anyone thought to look at other lift stations or storage tanks. Most lift stations are right in the middle of neighborhoods. Some close to schools and soccer fields, and some right in back yards, or at least next to a back yard. We all have to work together to come up with a proper solution. The proposed solution by ctrwd is the best one offered so far.

  4. Fox has comments from several people that seem to have some inside information. I would refer to their website. Changed my whole opionion of this story.

  5. This place is great! I'm piggy backing and saying the Cobb salad is great. But the ribs are awesome. $6.49 for ribs and 2 sides?! They're delicious. If you work downtown, head over there.

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