Exclusive: TGI Fridays in talks to sell itself to TriArtisan - sources

Fri Feb 28, 2014 3:28pm EST
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By Greg Roumeliotis and Olivia Oran

NEW YORK (Reuters) - TGI Fridays, the global casual dining restaurant chain known for its red-striped canopies and memorabilia-rich decor, is in advanced talks to sell itself to buyout firm TriArtisan Capital Partners, people familiar with the matter said on Friday.

TriArtisan, the private equity arm of investment bank Morgan Joseph, has emerged as the lead bidder in the auction for TGI Fridays and is negotiating final terms of a purchase agreement, the people said.

TriArtisan is partnered with another buyout firm, Sentinel Capital Partners, in its bid, two of the people added.

The exact price under negotiation could not be learned, but people familiar with the deal previously told Reuters the restaurant chain could be valued in the $800 million to $900 million range.

All the people spoke on condition of anonymity because the talks are confidential, and cautioned that the negotiations could still fall through. Representatives for TriArtisan, Sentinel and TGI Fridays did not immediately respond to requests for comment.

Privately held U.S.-based hotel conglomerate Carson said in November it had asked investment bank Piper Jaffray to explore strategic alternatives for TGI Fridays, including a possible sale. Piper Jaffray declined to comment on Friday.

Consumers are shunning restaurants that offer table service in favor of faster, cheaper options, prompting some owners of full-service casual dining chains such as TGI Fridays to explore a sale in the hope of attracting a high valuation.

Still, the outlook for the U.S. restaurant industry remains far from rosy. U.S. restaurant industry sales are expected to top $683 billion in 2014, an increase of 3.6 percent from last year, according to the National Restaurant Association. The projected rise would be an improvement from 2008 and 2009, but would still lag growth levels before the recession.   Continued...