Carl Karcher’s Buyout Offer Sends the Stock Down 12 Cents : Acquisition: Analysts speculated that bid of $9.50 per share was an attempt to nudge potential buyers into a counteroffer.

The offer by Carl Karcher and an investment group to take Karcher’s fast-food company private sent its stock price down 12 cents on Wednesday to close at $9.875.

Karcher, founder of the 600-outlet Carl’s Jr. restaurant chain, bid $9.50 a share on Tuesday for stock that the market had valued at $10.75 at the start of the day. He is proposing to buy back the two-thirds of the company’s shares that he does not already control.

Some analysts speculated Wednesday that Karcher is trying to nudge potential buyers into making a counteroffer before the Dec. 4 deadline on his bid. Wendy’s and Pepsico are the names most frequently mentioned.

Other analysts, however, said that competing bids are unlikely. The most that may happen, they say, is that shareholders persuade Karcher to offer 5% to 10% more.

“It wouldn’t surprise me if the price were slightly raised, but I don’t think there’s a whole lot of room on the upside,” said Laurie Lively Smith, vice president of Seidler Amdec Securities in Los Angeles. “It also wouldn’t surprise me if the deal went through as is.”

The Carl and Margaret Karcher Trust, together with Los Angeles investment company Freeman Spogli & Co., are offering to pay $171 million for the 18 million outstanding shares of Carl Karcher Enterprises Inc., parent of the Carl’s Jr. chain.

Karcher, who started the company 51 years ago, said on Sept. 4 that he intended to buy back outstanding shares and take the company private. The stock has been publicly traded since 1981. He said his offer would not be more than $10 a share for stock that was then selling between $7 and $8.

“The stock went up because people said, ‘Hey, this company’s worth a lot more than that,’ ” said Douglas Christopher, an analyst for the brokerage Crowell, Weedon & Co. in Los Angeles. He cited speculation about interest in Carl’s by Pepsico and Wendy’s.

For Karcher and the investment group to say that the stock is worth $9.50, Christopher said, is “a cop-out. . . . They argue that the stock was at $8 before they made the announcement.”

He puts its value at $15 a share. “The stock looks real cheap when in essence it’s not. The only reason the market undervalues it is because the company has never had a strategy it would follow long term.”

Christopher pointed out that the stock reached $18 a share in July, 1989, and that Carl’s management was comfortable with that valuation then.

Another analyst, David L. Rose at the brokerage L.H. Friend Weinress & Frankso in Irvine, said he was also surprised that the offer was so low.

“I was looking for $12 to $15, and many people on the street were looking for the same,” he said. “I think Carl does not want to pay a heck of a lot for his company.”

Any buyout offer must be approved by the shareholders.

Smith said she thinks the offer of $9.50 is an accurate reflection of the company’s worth. “The price might appear a little light, but, frankly, the company has had a terrible time in recent years,” she said. “I could characterize business at Carl’s as poor.”

She noted that same-store sales--a standard measure in the restaurant business--were down 5% for fiscal 1991 and 2.3% for fiscal 1992. For the first two quarters of fiscal 1993, Smith said, same-store sales were down 5% and 8%.

The chain’s attempt a couple of years ago to expand outside Southern California and into Northern California, Texas and Arizona was unsuccessful, Smith said.

That makes it unlikely, she said, that Pepsico would be interested in Carl’s, for the soft-drink and restaurant conglomerate does not seek to be a small, regional player in any field. Its other concepts--Taco Bell, Kentucky Fried Chicken and Pizza Hut--dominate their markets.

“It’s hard to see Carl’s as a national chain,” she said.

The decision to go private is a good one for the company, though, she said.

“From a strategic standpoint, Carl’s could prosper more without having the burden to grow to satisfy shareholders,” she said. “For a public restaurant company, there is a terrific burden to grow, to add more and more units. Carl’s would do best to maximize brand recognition here.”

Before shareholders have a chance to vote on the offer, it will be reviewed by a committee of the company’s directors, who are neither Karcher Enterprise officers nor family members.

Peter Churm, the chairman of the committee of outside directors that is reviewing the Karcher bid, said that the panel’s financial adviser, Lehman Bros., is contacting other companies that have expressed an interest in Carl Karcher Enterprises to see if they might make offers.

“There has been other interest expressed,” said Churm, who is chairman emeritus of Furon Co.

He said the committee’s members met Monday afternoon to discuss the offer that had been presented to them. “We just reviewed it and decided what our responsibilities are,” he said. No further meetings were scheduled, he said.

Asked how the committee could accept an offer that is below the selling price of the stock, he replied that the stock was selling for about $7 a share until rumors of the Karcher bid to go private started swirling. “That caused the price to go up,” he said.

The committee recognizes, however, that it has a responsibility to shareholders who bought the stock when it was selling for $10.50 a share, he said.

Other committee members are Daniel W. Holden, executive vice president and general counsel for Monnig Development Inc.; Kenneth Olsen, retired president of Vons Cos., and Elizabeth A. Sanders, a management consultant with Sanders Partnership.

Rose said Wednesday’s closing price of $9.875 reflects transactions by arbitrage buyers betting that the stock will rise. “That’s why the stock isn’t at $9.50,” he said.

Times staff writer Chris Woodyard contributed to this report.