El Torito Stock Soars on Speculation of W.R. Grace Buy-Out

Buoyed by speculation of a leveraged buy-out of portions of W.R. Grace & Co.’s restaurant division, common shares of El Torito Restaurants Inc. shot up more than 26% in price last week to finish near the top the New York Stock Exchange’s list of biggest gainers.

Shares of the Irvine-based Mexican restaurant chain, which is partially owned by New York-based Grace, closed Friday at $17.25 each, up $3.625 for the week on volume of 181,300 shares traded. With an increase in market value of 26.6% for the week, El Torito was No. 6 on the week’s list of Big Board gainers.

Despite the confirmation by Grace officials that it is considering the sale of some of its restaurant operations, it it still not known whether El Torito would be included in such a transaction.

“I don’t think anyone knows even within Grace whether (the buy-out) will even happen, let alone who is included,” said Jim Stryker, El Torito’s executive vice president and chief financial officer Friday.

However, because El Torito is one of the “biggest and most cohesive” units of Grace’s restaurant division, investors think it is a “logical part of a leveraged buy-out,” said Ward P. Lindenmayer, an analyst with the San Francisco brokerage house of S.G. Warburg, Rowe & Pitman, Akroyd Inc.