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DARDEN RESTAURANTS INC 8-K Report, Material Agreement (May 3, 2023)

Filed May 3, 2023For Securities:DRI

Summary

Darden Restaurants, Inc. (DRI) has entered into a definitive agreement to acquire Ruth's Hospitality Group, Inc. (RUTH) for $21.50 per share in cash, representing a total transaction value of approximately $715 million. This strategic acquisition aims to expand Darden's portfolio, which includes popular brands like Olive Garden and LongHorn Steakhouse, by adding Ruth's Chris Steak House, a well-established name in the upscale dining segment. The transaction is structured as a tender offer, where Darden's subsidiary, Ruby Acquisition Corporation, will commence an offer to purchase all outstanding shares of Ruth's Hospitality Group. This move is expected to enhance Darden's market presence and diversify its brand offerings, particularly in the full-service and fine-dining categories. Investors should note that Ruth's Hospitality Group has agreed to suspend its regular quarterly dividend in connection with the merger. The acquisition is subject to customary closing conditions, including regulatory approvals and a minimum tender threshold of over 50% of Ruth's outstanding shares. The deal is anticipated to be accretive to Darden's earnings per share.

Key Highlights

  • 1Darden Restaurants to acquire Ruth's Hospitality Group for $21.50 per share in cash.
  • 2The total transaction value is approximately $715 million.
  • 3The acquisition is structured as a tender offer by Darden's subsidiary, Ruby Acquisition Corporation.
  • 4Ruth's Hospitality Group has agreed to suspend its regular quarterly dividend.
  • 5The transaction is subject to customary closing conditions, including a minimum tender of over 50% of Ruth's outstanding shares.
  • 6The deal is expected to be accretive to Darden's earnings per share.
  • 7Ruth's Hospitality Group has agreed to customary 'no-shop' provisions, with a termination fee of $23.9 million under certain circumstances.

Frequently Asked Questions

This filing announces the execution of a definitive Merger Agreement between Darden Restaurants, Inc. (Parent) and Ruth's Hospitality Group, Inc. (Company) for Darden to acquire Ruth's Hospitality Group. It outlines the terms of a tender offer for Ruth's common stock and the subsequent merger.

Darden Restaurants will acquire Ruth's Hospitality Group for $21.50 per share in cash. The total transaction value is approximately $715 million.

The tender offer requires a minimum of over 50% of Ruth's outstanding shares to be validly tendered and not withdrawn. Other conditions include the expiration of the Hart-Scott-Rodino waiting period, absence of governmental prohibitions, and no termination of the Merger Agreement. Following a successful tender offer, a merger will occur, converting remaining shares not tendered into the right to receive the same cash consideration.

In connection with the merger, Ruth's Hospitality Group has agreed to suspend the payment of its regular quarterly dividend.