A Happy Ending?

The Friendly's Ice Cream saga reached a tentative conclusion yesterday with the apparent sale of the Company to a private equity concern for a modest (8%) premium over the last stock price.

Both management and Friendly's co-founder and current shareholder activist Pres Blake seemed somewhat happy with the result, although it was not his preference to sell the company:

If selling it gets rid of the chairman and the directors, this is the best for the stockholders, and the stockholders is what I'm interested in.

Now it's up to Sun Capital to turn Friendly's around.

Friendly's Update

Front page article in Globe today on the status of Friendly's, and the deteriorating relationship between co-founders and brothers Pres and Curtis Blake. The current management of the company has engaged Goldman Sachs to consider selling it, but at the same time has reached out to Curtis Blake to have him convince his older brother not to vote his shares with a hedge fund that has a significant position:

After meeting with the executives for a few hours at his home, the younger Blake the next morning faxed a handwritten, five-page letter to his older brother. The siblings, who started Friendly's during the Great Depression, live just 12 miles apart but haven't spoken to each other in more than a year because of a falling-out over the business. But Curtis broke the silence to protect Friendly's from what he called "a corporate raider."

"Our company is now in a very precarious position," Curtis wrote in January. "You alone are now in the position to control the entire future"...

"I'm sorry my brother isn't with me on this," Prestley said, "but I'm going to keep going because I know I'm right. I'm going to keep going until I can't go any further."

Said Curtis: "I'm very disappointed. He was my best friend for 85 years. It would have been a nice story if we ended up best friends for our entire life."

Friendly's For Sale?

Friendly's has apparently hired Goldman Sachs to advise them on possible options, including a possible sale. Perhaps in a related event, two hedge operators who own a sizable stake in the company sent a letter to shareholders, as highlighted by the Globe:

Meantime, on Tuesday Sardar Biglari , one of the firm's largest stockholders, sent a letter to other shareholders outlining his strategy to shake up the chain if he and business partner, Philip L. Cooley, win the two directors seats up for election at the company's annual meeting in May. He said the firm needs to convert more company-owned stores to franchises and curb executive compensation.

With founder Pres Blake's suit still pending, it seems likely that there will be more to come from this corporate story.

Friendly's on the Front Page

Stephen Syre's Globe business column today noted the corporate battle between Friendly's founder Press Blake and San Antonio hedge fund manager Sardar Bilgari, on one side, and current Friendly's Ice Cream management on the other. (Ed. note: as a long-time resident of Wilbraham, I am perhaps more cognizant of the story than others might be.) Blake is 92 and Bilgari is 29. Talk about strange bedfellows!