TGI Fridays sale could be near, report says

TGI Fridays, the Carlson-owned restaurant chain that has been for sale since November, may have found a suitor.

A report Friday by the Reuters news service said Minnetonka-based Carlson was in "advanced talks" with TriArtisan Capital Partners, a New York private equity firm, over sale of the 934-unit restaurant operation.

Carlson, which also has hotel and travel divisions under its hospitality umbrella, declined to comment on the report Friday afternoon.

"We will have no comment until we are prepared to make an announcement on Fridays," said Carlson spokeswoman Molly Biwer.

According to Reuters, TriArtisan, which is a division of the New York investment bank Morgan Joseph, is in final negotiations for a purchase agreement. The news service also said TriArtisan has partnered with Sentinel Capital Partners to make the deal.

Neither TriArtisan or Sentinel could be reached for comment Friday. But both have been recently active in the restaurant sector.

Late last year, TriArtisan was a finalist in the bidding for the parent company of the fast-food chains Hardees and Carl's Jr., before it lost out to Roark Capital Group. Sentinel acquired the Checker and Rally's hamburger chains in late January.

Quoting anonymous sources, Reuters said TGI Fridays could fetch between $800 million and $900 million.

Carlson put Fridays on the auction block in November by announcing it had retained Piper Jaffray to explore "strategic alternatives" for the 48-year-old casual dining brand.

At that time, Carlson CEO Trudy Rautio said she expected the process to take three to six months.

Fridays, which has nearly 400 of its units in overseas markets, had $2.7 billion in sales last year, about the same as in 2012.

Although Fridays is an old brand, it has taken recent steps to shake up its appearance inside and out with a strategy of going back to its roots as a social spot for an upwardly mobile and free-spending younger clientele.

Carlson put its restaurant operation on the block at an opportune time.

"Fridays picked a good time to be a seller," said John Hamburger, president of the trade organization Restaurant Finance Monitor. "Restaurant valuations are at an all-time high. There's a lot of capital out there willing to finance restaurants."

Hamburger said TGI Fridays' U.S. presence might be a tad stale, but its international locations would be attractive to potential buyers.

"They have a lot of things going on overseas," Hamburger said of Fridays.

When Carlson announced that it was shopping Fridays around, the company reported that the Fridays in Shanghai and in Taipei, Taiwan's capital, were seeing sales well above their market peers.

David Phelps • 612-673-7269