Unidentified suitor joins Rainforest pursuit

Friday, Jan. 14, 2000 | 10:54 a.m.

SUN STAFF AND WIRE REPORTS

Rainforest Cafe Inc. said it received an unsolicited $125 million cash and stock offer from an unidentified publicly traded company, beating an earlier bid from Lakes Gaming Inc.

The operator of 37 jungle-theme restaurants, including one at the MGM Grand in Las Vegas, agreed last month to accept 0.55 of a Lakes share for each Rainforest Cafe share in an all-stock transaction. The new offer would be for half stock, half cash, Rainforest said.

Though the Lakes deal was originally valued at $108 million, a subsequent decline in Lakes' share price makes the current value about $100 million. Lakes stock was quoted at $7.75 a share, up 12.5 cents in midday trading today, while Rainforest was up $1.0625 a share, a 27.4 percent gain, to $4.9375.

Under the original agreement with Lakes, Rainforest Cafe might have to pay a $2 million termination fee to Lakes if Rainforest terminates the deal and completes a competing merger agreement within six months.

Rainforest described the new offer as preliminary and said it is from a publicly traded restaurant company. The proposal calls for Rainforest shareholders to get about $2.50 a share in cash and about $2.50 in stock of the offering company. The Lakes offer is valued at about $4.40 in stock.

Rainforest said its directors would meet next week to consider all options. Lyle Berman is chairman of both Lakes and Rainforest and owns about 11 percent of Lakes stock and 7 percent of Rainforest.

archive