Applebee's Looks Around the Neighborhood

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The grazers and bottom-feeders have arrived. Applebee's (Nasdaq: APPB) announced this morning that "several non-binding, preliminary proposals to acquire the company" have come in since the company put itself up on the block two months ago. The company will now narrow the pool of proposals to the more serious contenders and solicit binding bids before digging into any potential negotiations.

As in any auction marketplace, having multiple bidders is a desirable thing. But it doesn't always work out. Media reports noted four interested parties in IMAX (Nasdaq: IMAX) by name last year, and nothing came of it. No doubt aware that the same thing could happen here, Applebee's is moving ahead with exploring a recapitalization of the company to enhance shareholder value if acceptable bids don't trickle in.

Applebee's also made nice with Breeden Capital, announcing a settlement this morning that will spare the casual-dining chain the embarrassment of a proxy battle at next month's annual meeting.

This probably isn't the way that Applebee's would want to go out. After posting 31 consecutive quarters of higher comps, the troubled restaurateur has seen unit-level sales slide in each of the past four quarters.

Applebee's isn't alone. Other casual-dining chains, including Brinker (NYSE: EAT), have pulled up lame lately. So even though private-equity firms have snapped up several eateries in recent months -- especially casual steakhouse concepts -- Applebee's wouldn't be punching out at the top of its game.

Yes, eyeing a chart, you may notice that February's "strategic alternatives" announcement sent the stock barreling toward a 52-week high. Now the shares are a good trading day or two away from hitting a fresh all-time high. However, one can only imagine how much higher Applebee's would be trading if it had never stumbled in the first place. Given the choice, I'm sure Applebee's would rather be working the pan in the back of the kitchen than panhandling out in public.

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Longtime Fool contributor Rick Munarriz is a fan of Applebee's, especially its curbside takeout service when he's on the go. He does not own shares in any of the companies in this story. He is part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.