Collins Bids for Remaining 8% in Naugles

Collins Foods International, the majority owner of Naugles, said Tuesday that it has proposed to acquire the 8% of the company it doesn’t already own in a stock swap valued at $9.9 million.

Collins said it will exchange $4.50 worth of its common stock for each of the 2.2 million shares of Orange-based Naugles’ common stock outstanding--a premium to Naugles’ public shareholders of approximately 30% above the current trading price.

Proposal Hailed

The deal still must be approved by directors of the Mexican fast-food restaurant chain.

Industry analysts on Tuesday hailed the proposal as a move that could further bolster Naugles’ management, sales and financial status.

Los Angeles-based Collins, which acquired control of Naugles 14 months ago, already has pumped a considerable amount of money into the company, financed a major regional television advertising campaign for Naugles and has been bolstering its management team.

“We found it administratively very difficult and not very efficient” to operate Naugles as a public company, said Christopher Thomas, Collins’ vice president of finance.

Naugles, founded 15 years ago, went public in October, 1981. It hit its peak of 200 units in eight states by early 1984. Since then, the number of units has been cut to 175.

The rapid expansion brought Naugles a rising tide of red ink, and when Collins stepped in, the company was staggering under the weight of $45 million in losses.