Apple South says it will sell Applebee’s restaurants
MADISON, Ga. (AP) _ Apple South Inc. said Tuesday it plans to sell its 264 Applebee’s Neighborhood Grill and Bar restaurants and instead focus on its faster growing chains.
All the restaurants are expected to be sold within 18 months, the company said. The chain’s franchiser, Applebee’s International Inc., will buy 31 of the restaurants in Virginia.
Shares of both companies fell sharply on the news. Apple South dropped $3.18 3/4, or 19 percent, to $13.43 3/4, while Applebee’s fell $5, or 21 percent, to $18.75. Both trade on the Nasdaq Stock Market.
In 1995, Applebee’s restaurants accounted for about 90 percent of Apple South’s profits. Today, they account for less than half, said Tom DuPree Jr., Apple South’s chairman and chief executive.
Apple South will sell its 31 restaurants in Norfolk, Richmond, Roanoke and Charlottesville, Va., to Applebee’s International for $93.4 million.
The company also signed three letters of intent for the sale of 61 Applebee’s restaurants in Mississippi, Tennessee and Washington, D.C., for $115 million. Those purchasers were not disclosed.
Applebee’s International has agreed to assist in the sale of the remaining 103 restaurants.
The deals will leave Apple South with Don Pablo’s, Harrigan’s Grill and Bar, Hops Restaurant Bar & Brewery, Canyon Cafe and McCormick & Schmick’s seafood restaurants.
There are 960 Applebee’s restaurants in 48 states and six foreign countries.