J. Alexander's agrees to $72M sale to Fidelity National Financial

J. Alexander’s Corp., the owner-operator of 33 casual-dining restaurants, said Monday it has agreed to a $72 million cash-and-stock buyout with Fidelity National Financial Inc., a title insurance and mortgage services provider that also owns restaurant company American Blue Ribbon Holdings and O’Charley’s Inc.

J. Alexander’s, based in Nashville, Tenn. specialize in wood-fired cuisine. Following the transaction, which is expected to close in the fourth quarter, J. Alexander’s will be merged into American Blue Ribbon Holdings, which operates the Village Inn, Bakers Square, Max & Erma’s and Legendary Baking Brands.

J. Alexander’s shareholders will have a choice to receive either $12 per share in cash or a combination of $3 cash and one share of ABRH Class A common stock. The restaurant company’s stock, which is listed on the Nasdaq, has traded between $5.00 and $9.96 per share, as of Monday. The stock opened Monday at $11.40 and has traded as high as $11.75 in the morning hours.

Fidelity National Financial said that when issued, the shares of ABRH will be listed for trading on Nasdaq or an equivalent national securities exchange.

“We believe this transaction will provide significant benefits for our shareholders,” Lonnie J. Stout II, chairman, president and chief executive of J. Alexander’s said in a statement. “It not only rewards them with a cash premium for their existing shares, it offers them participation in the future business prospects of a much larger entity.”

William P. Foley II, chairman of Jacksonville, Fla.-based Fidelity National Financial, said, “J. Alexander’s provides the upscale casual restaurant guest with a high-quality dining experience and outstanding professional service. We are proud to add J. Alexander’s to American Blue Ribbon Holdings’ existing restaurant concepts.”

This marks the second restaurant company acquisition this year for FNF, which has been diversifying its portfolio. In February, the company purchased the publicly held O’Charley’s Inc. for $9.85 per share or about $221 million. O’Charley’s Inc. includes 213 O’Charley’s branches, 105 Ninety Nine restaurants and 10 Stoney River outlets.

After this buyout of J. Alexander’s, the combined restaurant operating companies will own and operate more than 700 locations in 43 states under seven different brands. The company will generate combined annual revenue of about $1.5 billion, the company said in a statement.

Earlier this year three groups of investors acting together pressed J. Alexander’s to place new directors on the board to “assist the company in improving its operational and financial performance.” The investors held a 12.6-percent collective ownership stake in the company.

For the most recent fiscal year ended December 2011, J. Alexander’s generated systemwide sales of $157 million, an increase of 5.4 percent over $149 million in the previous year, according to Nation’s Restaurant News research.

Contact Paul Frumkin at [email protected].