RUTH'S HOSPITALITY GROUP, INC. Item 1.01. Entry into a Material Definitive Agreement.
On
Pursuant to the Merger Agreement, and upon the terms and subject to the
conditions thereof, Merger Sub has agreed to commence a tender offer (the
"Offer"), to purchase all of the shares of common stock, par value
The Offer will initially remain open for a minimum of 20 business days from the date of commencement of the Offer. If at the scheduled expiration time of the Offer any condition to the Offer has not been satisfied and has not been waived by Parent or Merger Sub (to the extent permitted by the Merger Agreement), Merger Sub will, and Parent will cause Merger Sub to, extend the Offer in accordance with the terms of the Merger Agreement to permit the satisfaction of all Offer conditions. The obligation of Merger Sub to consummate the Offer is subject to the satisfaction or waiver of customary conditions, including, among others, (i) there being validly tendered and not validly withdrawn prior to the expiration of the Offer a number of Shares that, considered together with all other Shares (if any) beneficially owned by Parent and its affiliates, represent at least one more Share than 50% of the total number of Shares outstanding at the time of the expiration of the Offer (the "Minimum Condition"), (ii) any waiting period applicable to the Offer under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, having expired or otherwise been terminated, (iii) the absence of any law or order by any governmental authority of competent jurisdiction prohibiting, restricting, enjoining or otherwise making illegal the consummation of the Offer or the Merger, (iv) the Merger Agreement not having been terminated in accordance with its terms (the "Termination Condition") and (v) other customary conditions set forth in Annex I to the Merger Agreement. The Minimum Condition and the Termination Condition may not be waived by Parent or Merger Sub without the prior written consent of the Company.
Following the consummation of the Offer, subject to the terms and conditions of
the Merger Agreement and in accordance with Section 251(h) of the General
Corporation Law of the
Pursuant to the terms of Section 2.7(a) of the Merger Agreement, and except as otherwise agreed in writing by the Company, Parent and the holder thereof, each of the Company's restricted stock unit awards (the "Company RSAs") that is outstanding, whether vested or unvested as of immediately prior to the Effective Time, will automatically be fully vested, cancelled and converted into and will become the right to receive an amount in cash, without interest thereon (but subject to applicable withholding), equal to the product obtained by multiplying (i) the Merger Consideration (as defined in the Merger Agreement) by (ii) the total number of shares of Company Common Stock subject to such Company RSA.
Pursuant to the terms of Section 2.7(b) of the Merger Agreement, and except as otherwise agreed in writing by the Company, Parent and the holder thereof, each of the Company's restricted stock units (the "Company RSUs") that is outstanding, whether vested or unvested as of immediately prior to the Effective Time, will
--------------------------------------------------------------------------------
automatically be fully vested, cancelled and converted into and will become the right to receive an amount in cash, without interest thereon (but subject to applicable withholding), equal to the product obtained by multiplying (i) the Merger Consideration by (ii) the total number of shares of Company Common Stock subject to such Company RSU.
Pursuant to the terms of Section 2.7(c) of the Merger Agreement, and except as otherwise agreed in writing by the Company, Parent and the holder thereof, each of the Company's performance-based restricted stock units of the Company and market stock units of the Company (collectively, the "Company PSUs") that is outstanding, whether vested or unvested as of immediately prior to the Effective Time will automatically be fully vested, cancelled and converted into and will become the right to receive an amount in cash, without interest thereon (but subject to applicable withholding), equal to the product obtained by multiplying (i) the Merger Consideration by (ii) the total number of shares of Company Common Stock subject to such Company PSU, with the achievement of the performance-based vesting metrics applicable to each Company PSU based on achievement of the applicable performance metrics as specified in the applicable award agreement.
Pursuant to the terms of Section 2.7(d) of the Merger Agreement, and except as otherwise agreed in writing by the Company, Parent and the holder thereof, each of the Company's deferred stock units (the "Company DSUs") that is outstanding, whether vested or unvested as of immediately prior to the Effective Time will automatically be fully vested, cancelled and converted into and will become the right to receive an amount in cash, without interest thereon (but subject to applicable withholding), equal to the product obtained by multiplying (i) the Merger Consideration by (ii) the total number of Company DSUs credited to the holder's account.
The Merger Agreement includes representations, warranties and covenants of the Company, Parent and Merger Sub customary for a transaction of this nature. The Company has also agreed (i) to use reasonable best efforts to conduct its business in all material respects in accordance with applicable law and in all material respects in the ordinary course of business, and (ii) not to take certain actions, including declaring or paying any dividend in respect of the Company's capital stock or other equity or voting interests, in each case, prior to earlier to occur of (x) the termination of the Merger Agreement and (y) the Effective Time.
The Company has agreed to customary "no-shop" restrictions on its ability to solicit alternative acquisition proposals from third parties and engage in discussions or negotiations with third parties regarding alternative acquisition proposals. Notwithstanding these restrictions, the Company may, under certain circumstances, provide information to and participate in discussions or negotiations with third parties with respect to a bona fide written alternative acquisition proposal that the board of directors of the Company (the "Company Board") has determined in good faith (after consultation with its financial advisors and outside legal counsel) constitutes or could reasonably be expected to result in a Superior Proposal (as defined in the Merger Agreement), if failing to do so would be reasonably likely to be inconsistent with the Company Board's fiduciary duties under applicable law.
The Merger Agreement also includes customary termination provisions for both the
Company and Parent, and provides that, in connection with the termination of the
Merger Agreement under specified circumstances, including termination by the
Company to accept and enter into an agreement with respect to a Superior
Proposal, the Company will pay Parent a termination fee of
The Company Board has unanimously (i) determined and declared that the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, are advisable and in the best interests of the Company and its stockholders, (ii) approved the execution, delivery and performance by the Company of the Merger Agreement and the consummation of the transactions contemplated thereby, including the Offer and the Merger, (iii) resolved to recommend that the Company's stockholders accept the Offer and tender their . . .
Item 8.01 Other Events.
On
Additional Information and Where to Find It
The Offer described above has not yet commenced. This communication is for
informational purposes only and is neither an offer to purchase nor a
solicitation of an offer to sell any securities, nor is it a substitute for the
Offer materials that Parent and Merger Sub will file with the
THE OFFER MATERIALS (INCLUDING AN OFFER TO PURCHASE, A RELATED LETTER OF TRANSMITTAL AND CERTAIN OTHER OFFER DOCUMENTS) AND THE SOLICITATION/RECOMMENDATION STATEMENT WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED ACQUISITION AND THE PARTIES THERETO. INVESTORS AND STOCKHOLDERS OF THE COMPANY ARE URGED TO READ THESE DOCUMENTS CAREFULLY WHEN
4
--------------------------------------------------------------------------------
THEY BECOME AVAILABLE (AND EACH AS IT MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME) BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION THAT INVESTORS AND STOCKHOLDERS OF THE COMPANY SHOULD CONSIDER BEFORE MAKING ANY DECISION REGARDING TENDERING THEIR SHARES IN THE OFFER.
The Offer materials (including the Offer to Purchase and the related Letter of
Transmittal), as well as the Solicitation/Recommendation Statement, will be made
available to all investors and stockholders of the Company at no expense to them
at under the "SEC Filings" section of the Company's website at
www.rhgi.com/investors, and (once they become available) will be mailed to the
stockholders of the Company free of charge. The information contained in, or
that can be accessed through, the Company's website is not a part of, or
incorporated by reference in, this communication. The Offer materials (including
the Offer to Purchase and the related Letter of Transmittal), as well as the
Solicitation/Recommendation Statement, will also be made available for free on
the
Cautionary Statement Regarding Forward-Looking Statements
Certain statements either contained in or incorporated by reference into this document, other than purely historical information, including statements relating to the acquisition of the Company by Parent and any statements relating to the Company's business and expected operating results, and the assumptions upon which those statements are based, are "forward-looking statements." These forward-looking statements generally include statements that are predictive in nature and depend upon or refer to future events or conditions, and include words such as "believes," "plans," "anticipates," "projects," "estimates," "expects," "intends," "strategy," "future," "opportunity," "may," "will," "should," "could," "potential," or similar expressions. Forward-looking statements are based on management's current expectations and beliefs, as well as a number of assumptions, estimates and projections concerning future events and do not constitute guarantees of future performance. These statements are subject to risks, uncertainties, changes in circumstances, assumptions and other important factors, many of which are outside management's control, that could cause actual results to differ materially from the results discussed in the forward-looking statements. Such forward-looking statements include those relating to the ability to complete, and the timing of completion of, the transactions contemplated by the Merger Agreement, including the parties' ability to satisfy the conditions to the consummation of the Offer and the other conditions set forth in the Merger Agreement and the possibility of any termination of the Merger Agreement. Actual results may differ materially from current expectations because of numerous risks and uncertainties including, among others: (i) the risk that the proposed transaction may not be completed in a timely manner or at all; (ii) uncertainty surrounding the number of shares of the Company's common stock that will be tendered in the Offer; (iii) the risk of legal proceedings that may be or have been instituted related to the Merger Agreement, which may result in significant costs of defense, indemnification and liability; (iv) the possibility that competing offers or acquisition proposals for the Company will be made; (v) the possibility that any or all of the various conditions to the consummation of the Offer or the Merger may not be satisfied or waived, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the Offer or the Merger; (vi) the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement; (vii) the effects of disruption from the transactions on the Company's business and the fact that the announcement and pendency of the transactions may make it more difficult to establish or maintain relationships with employees and business partners; (viii) Parent's ability to realize the synergies contemplated by the proposed transaction and integrate the business of the Company; (ix) reductions in the availability of, or increases in the cost of, USDA Prime grade beef, fish and other food items; (x) changes in economic conditions, including inflation, increasing interest rates, higher unemployment, slowing growth or recession; (xi) reductions in consumer discretionary income and general competition in the restaurant industry; (xii) the effect of shortages or increases in labor costs, state or local government regulations related to the sale or preparation of food, the sale of alcoholic beverages and the opening of new restaurants; (xiii) risks in the markets where the Company's restaurants are located; and (xiv) the inability to successfully integrate franchisee acquisitions into the Company's business operations, economic, regulatory and other limitations on the Company's ability to pursue new restaurant openings and other organic growth opportunities. The risks and uncertainties may be impacted by the COVID-19 pandemic (including supply chain
5
--------------------------------------------------------------------------------
constraints, labor shortages and inflationary pressure). The foregoing factors
should be read in conjunction with the risks and cautionary statements discussed
or identified in the Company's public filings with the
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. Exhibit Description 2.1* Agreement and Plan of Merger, dated as ofMay 2, 2023 , by and among Darden Restaurants, Inc.,Ruby Acquisition Corporation andRuth's Hospitality Group, Inc. 10.1* Tender and Support Agreement, dated as ofMay 2, 2023 , by and among Darden Restaurants, Inc.,Ruby Acquisition Corporation ,Ruth's Hospitality Group, Inc and the stockholders party thereto. 99.1 Joint Press Release, datedMay 3, 2023 . 104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
* Schedules omitted pursuant to Item 601(b)(2) of Regulation S-K.
agrees to furnish supplementally a copy of any omitted schedule to the
request.
6
--------------------------------------------------------------------------------
© Edgar Online, source
