Subsequent Events

12 Months Ended

Dec. 31, 2023

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

On January 16, 2024, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with RBI, and BK Cheshire Corp, a Delaware corporation and subsidiary of RBI, (“Merger Sub”, and together with RBI, the “Buyer Parties”), providing for the merger of Merger Sub with and into the Company, with the Company continuing as the surviving corporation (the “Merger”).

A special transaction committee (the “Special Committee”) of independent and disinterested members of the Company’s board of directors (the “Company Board”) unanimously adopted resolutions recommending that the Company Board approve and adopt the Merger Agreement and the transactions contemplated thereby and agree to recommend that the Unaffiliated Company Stockholders (as defined in the Merger Agreement) adopt the Merger Agreement. Thereafter, the Company Board unanimously approved the Merger Agreement and agreed to recommend that the stockholders of the Company adopt the Merger Agreement. Subject to the terms and conditions set forth in the Merger Agreement, each share of our common stock, par value $0.01 per share, outstanding immediately prior to the effective time of the Merger (the “Effective Time”) will, at the Effective Time, automatically be converted into the right to receive $9.55 in cash, without interest, subject to any required tax withholding.

If the Merger is consummated, the Company's common stock will be delisted from The NASDAQ Global Market and deregistered under the Exchange Act, as promptly as practicable following the Effective Time.

The Merger Agreement includes a 30-day “go shop” period that allowed the Company to affirmatively solicit alternative proposals from interested parties. As of the report date of this Consolidated Financial Statements, the 30-day go shop has expired and the Merger is expected to close in the second quarter of 2024 subject the conditions set forth below.

Consummation of the Merger is subject to certain conditions set forth in the Merger Agreement, including, but not limited to, the: (A) affirmative vote of the holders of (i) a majority of all of the outstanding shares of Company capital stock to adopt the Merger Agreement and (ii) a majority of all of the outstanding shares of Carrols Common Stock held by the Unaffiliated Company Stockholders to adopt the Merger Agreement; (B) expiration or termination of any waiting periods (and any extensions thereof) applicable to the consummation of the Merger under the HSR Act; (C) absence of any law or order in the United States restraining, enjoining or otherwise prohibiting the Merger; and (D) absence of a Company Material Adverse Effect (as defined in the Merger Agreement).

The Merger Agreement contains certain termination rights for the Company, on the one hand, and the Buyer Parties, on the other hand. Upon termination of the Merger Agreement under specified circumstances, the Company will be required to pay RBI a termination fee of $19,000,000 (or, if termination occurs in certain circumstances prior to the No-Shop Period Start Date (as defined in the Merger Agreement), $9,500,000). In addition to the foregoing termination rights, and subject to certain limitations, the Company or RBI may terminate the Merger Agreement if the Merger is not consummated by November 30, 2024.

Effective February 22, 2024, the Company's Board of Directors declared a regular quarterly cash dividend of $0.02 per share on all issued and outstanding shares of the Company's common stock, including common stock issuable on the conversion of the Company's Series D Convertible Preferred Stock, that will be paid on April 5, 2024 to stockholders of record as of the close of business on March 11, 2024.