Shareholders in Summit OK Sale to CKE

Shareholders of Summit Family Restaurants have approved the Salt Lake City chain’s $24-million acquisition by CKE Restaurants Inc., Summit executives said Monday.

Summit said that its stock would no longer trade on the Nasdaq, and that it had expected the transaction to take effect Monday. The acquisition was approved by holders of 65.1% of the company’s stock, Summit said.

But CKE executives declined Monday to comment on the vote.

One restaurant industry observer linked CKE’s reticence to talk about the vote to unanswered questions surrounding Securities and Exchange Commission regulations governing the rights of dissenting shareholders.

“Those questions don’t have clear-cut answers,” the restaurant industry observer said, adding that CKE needs “more time to sort it out.”

Summit’s news release, which provided some details about the Friday shareholder vote, did not say how many dissenting shareholders had complied with SEC regulations governing opposition to a merger.

The release also failed to address contentions by a Summit shareholder who reportedly alleged that Friday’s vote was marred by voting irregularities.

Rights of dissenting shareholders could play a key role in whether the deal goes forward. In June, CKE Chairman William P. Foley II threatened to back away from the planned merger if the process governing dissenting shareholders proved to be too costly.

In its news release, Summit said only that dissenting shareholders who had “not validly asserted dissenters’ rights” would receive the same payment for their stock as shareholders who supported the merger.

CKE had offered a combination of $2.63 in cash and 0.1043 shares of CKE common stock in exchange for outstanding Summit shares.

Summit operates 124 JB’s Restaurants, Hometown Buffets and Galaxy Diners in western states.

CKE’s stock was unchanged at $22.75 in New York Stock Exchange trading, while Summit was unchanged at $4.50.