Chuck E. Cheese takes buyout For $950 Million

Chuck E. Cheese restaurant chain is being acquired by an Apollo Global Management affiliate for about $950 million.

The company, which has four locations in Orlando and 577 locations in total throughout 47 states and 10 foreign countries, agreed to the buyout Wednesday, reports the Associated Press.

From CNN Money:

Apollo is paying an 11.5% premium from Wednesday’s CEC stock close and 25% over the closing price on Jan. 7. That was yesterday media speculation in regards to a purchase started driving up CEC share prices.

CEC has reported a drop in revenue in five from the last seven quarters. But shares of stock were up 33% this past year, helped with a 13% increase in the dividend announced in October.

All exactly the same, CEC has faced numerous challenges with revenue declines the Apollo Group is taking advantage of.

Some may remember Apollo among the buyers of Hostess Brands this past year.

Apollo in fact buys troubled companies to turn them around, in what many know as a leveraged buyout.

USA Today reported that CEC may seek out superior proposals from limited third parties until Jan. 29. “The company, which announced Thursday it adopted a shareholder rights plan, had been reviewing its strategic options. A shareholder rights plan, also referred to as a “poison pill,” is often used by businesses attempt to ward off hostile takeover attempts.

CEC stock is up 9% year up to now.