Rally’s Hamburgers Revives Deal for Giant Group, Checkers Drive-In

Resurrecting a deal that fell apart last year, Rally’s Hamburgers Inc. said Monday it will acquire Giant Group Inc. and the rest of Checkers Drive-In Restaurants Inc. that it doesn’t already own for about $65 million in stock.

The complex transaction completes a plan by William P. Foley II, the chairman of Carl’s Jr. parent CKE Enterprises Inc. in Anaheim, to bring the operations of the two chains under one roof.

Clearwater, Fla.-based Checkers and Los Angeles-based Rally’s each operate 485 double drive-thru hamburger stands, in the Southeast and Midwest, respectively. The combined companies will keep the Checkers name and have its corporate offices in Beverly Hills.

The deal will bring the new Checkers about $50 million in cash and other assets, which will be used to combine the operations for the two chains.

Shares of Giant Group, controlled by Burt Sugarman, rose 40%, or $2.19, to $7.88 in Nasdaq trading. Rally’s shares rose 6 cents, to $1.15.

The companies already had overlapping ownership, with Giant owning 11% of Rally’s, which in turned owned 26% of Checkers. The deal won’t produce any senior management changes. Foley, founder and chairman of Irvine-based Fidelity National Financial Inc., will remain chairman; Sugarman, vice chairman; and Jay Gillespie, president and chief executive.

The deal still requires approvals of the three companies’ shareholders, but is expected to be completed by year’s end.