SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 12, 1998
SBARRO, INC.
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(Exact name of registrant as specified in its charter)
New York
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(State or other jurisdiction of incorporation)
1-8881 11-2501939
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(Commission File Number) (IRS Employer Identification No.)
763 Larkfield Road, Commack, New York 11725
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (516) 864-0200
Not Applicable
(Former name or former address, if changed since last report)
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Item 5. Other Events.
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On January 12, 1998, Carmela Sbarro was elected a director of the
Company to fill a vacancy in the Board.
On January 20, 1998, the Company issued a press release (the "Press
Release") reporting that the Company had received a proposal from members of the
Sbarro family for the merger of the Company with a company to be owned by them
and to announce preliminary fourth quarter and year-end 1997 results.
A copy of the Press Release is attached to this report as Exhibit
99.01.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
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(a) Financial statements of business acquired:
Not applicable.
(b) Pro forma financial information:
Not applicable.
(c) Exhibits:
99.01: Sbarro, Inc. Press Release dated January 20,
1998.
99.02: Proposal dated January 12, 1998 on behalf of
Mario Sbarro, Joseph Sbarro, Anthony Sbarro and
the Trust of Carmela Sbarro to the Board of
Directors of the Company.
99.03 Amendment and supplement dated January 20, 1998
on behalf of Mario Sbarro, Joseph Sbarro,
Anthony Sbarro and the Trust of Carmela Sbarro
to the Board of Directors of the Company.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SBARRO, INC.
Date: January 21, 1998 By: /s/ Robert S. Koebele
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Robert S. Koebele,
Vice President-Finance
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<PAGE>
EXHIBIT INDEX
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Exhibit
Number Description
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99.01 Sbarro, Inc. Press Release dated January 20, 1998.
99.02 Proposal dated January 12, 1998 on behalf of Mario Sbarro, Joseph
Sbarro, Anthony Sbarro and the Trust of Carmela Sbarro to the
Board of Directors of the Company.
99.03 Amendment and supplement dated January 20, 1998 on behalf of
Mario Sbarro, Joseph Sbarro, Anthony Sbarro and the Trust of
Carmela Sbarro to the Board of Directors of the Company.
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[LOGO]
PRESS RELEASE
CONTACT: Robert S. Koebele
Vice President, Finance
SBARRO, INC.
(516) 864-0203
SUMMARY: SBARRO family proposes
the acquisition of all the public shares
in Sbarro, Inc. for $28.50 per share;
SBARRO, INC. announces
preliminary fourth quarter and
year-end 1997 results
FOR IMMEDIATE RELEASE
Commack, L.I., New York.........................................January 20, 1998
Sbarro, Inc. (listed New York Stock Exchange "SBA") announced that it
received a proposal last week from members of the Sbarro family for the merger
of the Company with a company to be owned by them pursuant to which the public
shareholders of the Company would receive $28.50 per share in cash, or an
aggregate of approximately $380 million for the 13.3 million shares
(approximately 65% of outstanding shares) of the Company's Common Stock not
currently owned by the members of the Sbarro family.
The Company also announced that its Board of Directors has
established a special committee to evaluate and consider the offer.
The proposal is subject, among other things, to (i) entering into a
definitive merger agreement, (ii) approval of the transaction by the special
committee of the Board, the full Board of Directors and the Company's
shareholders, (iii) receipt of satisfactory financing for the transaction, (iv)
the immediate suspension of dividends by the Company and (v) receipt of a
fairness opinion from the financial advisor to the special committee of the
Board stating that the proposed transaction is fair, from a financial point of
view, to the public shareholders. The Sbarro family members stated that they
have received a letter from an investment banking firm which indicated that,
subject to certain conditions, the firm was highly confident that financing for
the transaction could be obtained. The family members have also advised the
Company that they are not interested in selling their interests in the Company.
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<PAGE>
The Company also announced that, based on preliminary indications,
its earnings from operations for the fiscal year ended December 28, 1997 are
expected to approximate $38.0 million or $1.87 basic earnings per share compared
to $37.4 million or $1.84 basic earnings per share for the fiscal year ended
December 29, 1996. For the fourth quarter of fiscal 1997, earnings from
operations are expected to approximate $14.0 million or $0.70 basic earnings per
share compared to $14.6 million or $0.72 basic earnings per share for the fourth
quarter of fiscal 1996. The Company further announced that its fiscal 1997
earnings will be affected by an evaluation of its investment in certain units of
one of its joint ventures. The Company indicated that such evaluation will
require a charge to earnings, but that it is premature to quantify the amount of
such charge at the current time.
Commenting on the anticipated operating results, Mario Sbarro,
President and Chairman of the Board, noted that earnings for fiscal 1997 were
adversely affected by a reduction in comparable unit sales of 0.5% for all of
1997 and 1.0% for the fourth quarter of 1997. Earnings in both reported periods
were also adversely affected by a lower than anticipated number of unit openings
and generally higher costs. The Company expects to release final earnings during
the week of February 9, 1998.
The Company develops and operates a national chain of family-style,
cafeteria-type Italian restaurants under the Sbarro name. At December 28, 1997
there were 862 Sbarro restaurants in operation, 623 of which were Company-owned
and 239 of which were franchised.
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Exhibit 99.02
January 12, 1998
Board of Directors of Sbarro, Inc.
Gentlemen:
I am pleased to extend a proposal, on behalf of myself, Joseph
Sbarro, Anthony Sbarro and the Trust of Carmela Sbarro (the "Sbarro Family"), to
acquire all of the outstanding shares of Common Stock of Sbarro, Inc. (the
"Company") not currently owned by the Sbarro Family (the "Public Shares"). The
transaction would be structured as a cash merger in which each holder of Public
Shares would receive $28.50 per share, or an aggregate of approximately $380
million, based on the number of Public Shares outstanding as of December 28,
1997.
Consummation of the acquisition would be subject, among other things,
to (i) entering into a definitive agreement with the Company with respect to the
transaction, (ii) approval of the transaction by a special committee of the
Company's Board of Directors (the "Special Committee"), the Company's Board of
Directors and its shareholders, (iii) receipt of satisfactory financing for the
transaction (the Sbarro Family has received a highly confident letter from Bear
Stearns with respect to receipt of such financing) and (iv) receipt of a
fairness opinion from the financial advisor to the Special Committee that
indicates that the proposed transaction is fair from a financial point of view
to the holders of Public Shares. We are in the process of drafting such an
agreement, which will reflect all of the aspects of our proposed offer, and will
provide the agreement to you shortly.
We believe that our proposal is beneficial to both the Company and
its public shareholders and is a fair one to the public shareholders. The
proposed acquisition price of $28.50 represents a significant premium over
Friday's closing price on the New York Stock Exchange of $25.50, as well as a
premium over the average closing price for each trading day during the last
twelve months.
We wish to make it clear that we are not interested under any
circumstances in selling our interest in the Company.
We look forward to working with you and the advisors to the Special
Committee to complete this transaction and hope you will give this proposal your
prompt attention. We reserve the right to amend or withdraw this proposal at any
time in our discretion.
Sincerely,
/s/ Mario Sbarro
Mario Sbarro
Exhibit 99.03
January 20, 1998
Board of Directors of Sbarro, Inc.
Gentlemen:
This letter will supplement and amend the second paragraph in the
proposal made in the letter dated January 12, 1998 on behalf of myself, Joseph
Sbarro, Anthony Sbarro and the Trust of Carmela Sbarro (the "Sbarro Family") for
the merger of the Company with a company to be owned by the Sbarro Family.
Consummation of the acquisition would be subject, among other things,
to (i) entering into a definitive merger agreement with the Company with respect
to the transaction, (ii) approval of the transaction by the special committee of
the Company's Board of Directors (the "Special Committee"), the full Board of
Directors and the Company's shareholders, (iii) receipt of satisfactory
financing for the transaction (the Sbarro family has received a highly confident
letter from Bear Stearns with respect to receipt of such financing), (iv) the
immediate suspension of dividends by the Company and (v) receipt of a fairness
opinion from the financial advisor to the Special Committee stating that the
proposed transaction is fair, from a financial point of view, to the public
shareholders.
Other than as set forth in the paragraph above, the provisions in our
letter dated January 12, 1998 remain the same.
We look forward to working with you and the advisors to the Special
Committee to complete this transaction and trust you will give this proposal
your prompt attention. We reserve the right to amend or withdraw this proposal
at any time in our discretion.
Sincerely,
/s/ Mario Sbarro
Mario Sbarro
