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Friendly sold to buyout firm in $337m deal

WILBRAHAM -- Friendly Ice Cream Corp. said yesterday it has agreed to sell itself to Freeze Operations Holding Corp. for $337.2 million in an all-cash transaction expected to close during the third quarter of 2007.

Shareholders will receive $15.50 per share from the affiliate of the Boca Raton, Fla.-based buyout firm, Sun Capital Partners Inc. The offer represents an 8.2 percent premium over the closing price of Friendly's common stock on Friday, the company said in a statement released late yesterday.

The deal has been unanimously endorsed by its board of directors, which plans to recommend that shareholders back it. Key individual and institutional shareholders who collectively own more than 50 percent of the company's stock have entered into an agreement to vote for the transaction, according to the statement.

The transaction requires support from 66 percent of shareholders .

On March 7, Friendly said it will consider putting itself up for sale, and that it swung to a profit in the fourth quarter.

"We believe this transaction delivers very attractive value to our shareholders, and it does so more quickly and with greater certainty than other alternatives we examined," Friendly president and chief executive officer George Condos said.

Friendly was started in Springfield in 1935 by brothers Prestley and Curtis Blake. Prestley Blake sold the company in 1979, but has continued to be a major shareholder and vociferous critic of the company's current management.

Friendly now runs a chain of 514 company-owned and franchise restaurants in the Northeast and distributes ice cream through more than 4,500 supermarkets and other retail locations.

"Friendly's is an iconic brand name in the family restaurant sector and we are excited to add this great franchise to our portfolio of restaurant investments," Gary Talarico, managing director of Sun Capital Partners, said in a statement. "We look forward to working with management to build on the legacy of this great brand and reinvigorate and expand the company within and beyond their historical markets."

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