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Wall Street Has No Stomach for Carl’s Jr.

CKE Restaurants public offering postponed


Carl’s Jr. and Hardee’s operator CKE Restaurants had planned to go public today with a price range of $14 to $16 a share, but demand was tepid and the deal had to be postponed, with the company citing “market conditions.”

It’s a big disappointment for private equity firm Apollo Global Management (NYSE:APO), which took CKE private in 2010 and wanted to sell about 6.7 million shares this week.

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CKE has taken actions to cut costs and improve its locations, especially for Hardee’s, but the company remains unprofitable and has $700 million in debt.

The competition for the burger joint remains intense, too. Hardee’s and Carl’s Jr. must not only battle old-time rivals McDonald’s (NYSE:MCD), Wendy’s (NASDAQ:WEN) and Burger King Worldwide (NYSE:BKW), but also up-and-comers like Five Guys Burgers and Fries and Smashburger.

So while “market conditions” might have been the announced reason to hold back on CKE’s public launch, there was far more to it.

Tom Taulli runs the InvestorPlace blog IPOPlaybook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of “All About Short Selling” and “All About Commodities.” Follow him on Twitter at @ttaulli. As of this writing, he did not own a position in any of the aforementioned securities.

Article printed from InvestorPlace Media,

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