GLENDALE Calif. IHOP Corp. declined to comment on news reports that the 1,300-unit family restaurant chain had bid more than $2 billion for Applebee's International Inc., parent of the industry's largest casual-dining brand. Applebee's also would not comment.
First carried by the Bloomberg news service, the accounts cited an unidentified source as indicating the offer had been tendered. Bloomberg said the information came from someone with direct knowledge of the bid.
IHOP chairman and chief executive Julie Stewart, a former president of Applebee's U.S. operations, said in February that the company was considering the acquisition of a "noncompetitive restaurant concept that is already franchising." In April, she told investors, "We have continued our acquisition evaluation process."
Applebee's said in April that it had received a number of "non-binding preliminary proposals" after announcing that it was considering a sale and other "strategic alternatives." The company has been unable in recent quarters to shake off a sales and earnings slump. It posted 2006 net income of $80.9 million, a 20.5 percent increase from the prior year, on revenues of $1.34 billion.
IHOP reported 2006 net profits of $44.5 million, a 1.4 percent uptick, on revenues of $349.6 million.
Some news reports quoted sources as doubting that IHOP had the wherewithal to buy a company of Applebee's scale without financing from a third party, like a private-equity company. In a securities filing, Applebee's had pegged the value of the brand at $4.7 billion. It operates or franchises more than 1,900 units.
In the wake of Wednesday's reports, Applebee's stock price spiked by 10 percent, but then fell back to close up about 4 percent for the day.
Stacy Roughan, director of investor relations for Glendale-based IHOP, said the company does not comment on market rumors. Laurie Ellison, spokeswoman for Overland Park, Kan.-based Applebee's, also said she would not comment on the matter.