Midas Announces Decision to Review Strategic Alternatives
12 August 2011 - 6:20AM
Business Wire
Midas, Inc. (NYSE: MDS) today announced that its board of
directors will explore and evaluate a range of strategic and
financial alternatives to enhance value for stockholders. The
company has retained J.P. Morgan Securities LLC to assist in this
process.
Strategic and financial alternatives may include, but are not
limited to, a possible sale, merger or other business combination.
As part of its strategic review, the company will conduct an
appraisal of its real estate portfolio of 208 properties which are
occupied by company-operated Midas shops or leased to Midas
franchisees. The properties were last appraised in late 2002.
There can be no assurances that this review will result in any
action. Midas does not expect to make any further comments unless
its board of directors has approved a specific course of
action.
“Following its meeting earlier this week, our board concluded
that this process will better enable it to determine the best path
to enhance value for Midas stakeholders and the brand,” said Alan
D. Feldman, Midas’ chairman and chief executive officer.
“As we announced in our second quarter earnings release on Aug.
4, the company continues to make solid progress in increasing sales
at franchised and company-operated shops, in co-branding of Midas
and SpeeDee locations and in improving profitability. Despite the
company’s improving performance, the board feels that the current
market valuation of Midas does not reflect the underlying value of
its assets and prospects for future growth,” Feldman said.
In addition, the company clarified that the earnings per share
guidance that it issued on Aug. 4 is prior to any potential impact
and expenses associated with the board’s decision to explore
strategic alternatives.
Kirkland & Ellis LLP serves as legal advisor to Midas, and
Sard Verbinnen & Co is serving as investor relations
counsel.
Midas is one of the world’s largest providers of automotive
service, offering brake, maintenance, tires, exhaust, steering and
suspension services at nearly 2,300 franchised, licensed and
company-owned Midas shops in 15 countries, including more than
1,500 in the United States and Canada. Midas also owns the SpeeDee
Oil Change business, with 165 auto service centers in the United
States and Mexico.
FORWARD LOOKING STATEMENTS AND RISK FACTORS
This news release contains certain forward-looking statements
that are based on management’s beliefs as well as assumptions made
by and information currently available to management. Such
statements are subject to risks and uncertainties, both known and
unknown, that could cause actual results, performance or
achievement to vary materially from those expressed or implied in
the forward-looking statements. The company may experience
significant fluctuations in future results, performance or
achievements due to a number of economic, competitive,
governmental, technological or other factors. Additional
information with respect to these and other factors, which could
materially affect the company and its operations, is included in
the company’s filings with the Securities and Exchange Commission,
including the company’s 2010 annual report on Form 10-K and
subsequent filings.
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