- CEC Entertainment's parent company, Queso Holdings, and its controlling stockholder, Apollo Global, along with Leo Holdings, terminated their business combination agreement on Monday, according to a press release.
- No reason was given for the termination, and the companies didn't respond to Restaurant Dive's requests for information. The board of directors of both Leo and Queso unanimously approved the deal earlier this year, and the companies were waiting on a vote from shareholders by the end of July.
- The deal, which was announced in April, would have made CEC Entertainment, which includes Chuck E. Cheese and Peter Piper Pizza, public.
While the companies would not say why they terminated the deal, the reason for the termination could lie with their shareholders, since they were expected to vote on the deal at the end of July. Leo Holdings shares increased 10% after the agreement failed, according to Bloomberg, which could suggest that shareholders were not on board with the deal.
If the agreement had been approved, CEC Entertainment would have been the first major restaurant brand to go public since FAT Brands entered the market in 2017. Apollo Global originally bought Chuck E. Cheese in 2014 and took the company private. Many companies have been going private of late, and analysts said a successful entrance back into the market could have spurred others to do so, according to Forbes.
CEC Entertainment was planning to use the proceeds from the deal to pay down $300 million in debt, but there has been no indication of what the company will do instead.
Chuck E. Cheese, which had been facing new competition from trampoline parks and bounce houses, has spending a $575,000 per unit for remodels across its system and has 60 planned for this year, according to Bloomberg. It also added a party pack for delivery via DoorDash, and refined its pricing to its play pass program.