CKE to repurchase its shares from hedge fund

Carpinteria-based CKE Restaurants Inc., owner of the Carl’s Jr. and Hardee’s hamburger chains, will buy back 6.1% of its shares from hedge fund Pirate Capital, its biggest investor.

The buyback of 4.07 million shares will cost $77.3 million, based on Monday’s closing stock price of $18.97. Shares closed Tuesday at $19.

Pirate Capital will no longer own a stake in the company after the sale, CKE said in a statement.

CKE has cut its long-term debt by 25% in the last year, part of a financial strategy to boost shareholder value via stock buybacks.

The company, which doubled its repurchase plan to $200 million in January, bought 2 million shares back from Pirate Capital in December.

CKE will finance the transaction, which will be completed by April 5, with debt.

Pirate Capital owned 7.5% of CKE as of Dec. 31, according to a Feb. 14 regulatory filing, making it the largest investor at that time. The fund did not return calls for comment.

CKE had a total of 3,105 franchised or company-owned restaurants as of Jan. 29.