Applebee's shareholders approve sale to IHOP

OVERLAND PARK, Kan. -- Shareholders of Applebee's International Inc. on Tuesday approved a $1.9 billion offer by pancake house operator IHOP Corp. to buy the casual dining chain.

The sale, which also includes Glendale, Calif.-based IHOP taking on $155 million in Applebee's debt, is expected to close later this month.

Under terms of the deal, Applebee's shareholders will be paid $25.50 per share, a slight premium from the $25.20 the company's shares fetched at the end of trading Monday.

Officials at both companies have characterized the deal as a way to help rejuvenate Applebee's, one of the nation's largest restaurant chains that has been plagued for the past year by falling sales and diminishing profits.

It also is viewed as a coup for IHOP, which is smaller than Applebee's but has shown success in building its own brand and sales in the face of economic headwinds.

Julia Stewart, IHOP's chief executive officer and a former Applebee's executive, has said she plans to refranchise hundreds of Applebee's company-owned stores and sell real estate tied to around 200 of those stores as a way to pay for the deal.

Shares of Applebee's were up 5 cents at $25.25 in trading early Tuesday. Shares of IHOP were down 17 cents at $62.51.