FORT LAUDERDALE Fla. Benihana Inc. stockholders on Monday gave the Japanese-themed restaurant company’s management the green light to merge with a subsidiary and issue 12.5 million new shares.
The proposed merger was opposed by members of the late Benihana founder Rocky Aoki’s family, which holds about 38 percent of shares in the Benihana of Tokyo trust, and hedge fund Coliseum Capital Management LLC. Both groups said the merger of Miami-based Benihana Inc. into subsidiary BHI Mergersub and a planned increase in shares would dilute their holdings.
Benihana has not released the actual vote count from the special shareholder meeting Monday in Fort Lauderdale.
Darwin C. Dornbush, Benihana’s chairman, in a statement thanked shareholders for their support and added: “As we have stated repeatedly, the increase in the authorized shares is one step in a series of actions being taken to ensure that the company has the flexibility and capability to take advantage of opportunities and to respond to rapidly changing economic conditions and credit markets.”
Last week, Richard C. Stockinger, president and chief executive of Benihana, said that not to approve the merger and give the company flexibility in the face of a tough economy would be “foolhardy.”
In mid-January, Benihana reported that the company’s three chains were still posting soft sales trends. Benihana reported that third-quarter same-store sales fell 3.4 percent companywide, reflecting declines of 5.9 percent at its namesake brand and 1.6 percent at the Haru concept. RA Sushi logged a 4.4 percent increase in same-store sales. Total sales for the third quarter, which ended Jan. 3, increased 4.8 percent to $70 million.
Stockinger said sales results led the company to fail to meet required ratios under its credit agreement with Wachovia Bank N.A. Wachovia amended the credit line, which the company said “will materially reduce the funds available,” reducing it from $60 million to $40.5 million. Further reductions are expected later this year and next.
Benihana owns and operates 98 restaurants in the United States, including 64 Benihana teppanyaki restaurants, nine Haru sushi locations and 25 RA Sushi Bar restaurants. The company also franchises 23 Benihana units in the United States, Latin America and the Caribbean.
Contact Ron Ruggless at [email protected].
