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SHAREHOLDER REQUEST IHOP MULLS PAYMENT REQUEST.

Byline: Brent Hopkins Staff Writer

GLENDALE - Ihop Corp. is enlisting the help of Salomon Smith Barney to assess a controversial shareholder request, the restaurant chain announced Friday.

According to those familiar with the company, major shareholder Southeastern Asset Management has petitioned for Ihop to monetize $290 million in loans to pay back shareholders. The money, currently loaned out to franchised restaurants, allows Ihop to retain some degree of control over its noncorporate sites.

Under the shareholder proposal, the loans would be sold to a third party and Southeastern Asset and other shareholders would benefit from the cash.

Dennis Joe, a restaurant analyst for Sidoti Company LLC, took a dim view of the Southeastern's proposed plan.

``We don't think it's a great idea to be monetizing all the long-term receivables,'' he said. ``What you'll probably see is a partial monetization. They'll hold onto most of the loans, because they represent a recurring stream of revenue to Ihop with the interest.''

Southeastern declined to comment, but Kim Herzer, Ihop's president and chief executive officer, said the financial advisers would help evaluate which course would be the best for all involved.

``Salomon will assist us in evaluating various strategic and structural alternatives available to the company, including suggestions we received from Ihop's largest shareholder, Southeastern Asset Management Inc., about the possibility of securitizing certain receivables,'' he said in a statement.
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Title Annotation:Business
Publication:Daily News (Los Angeles, CA)
Geographic Code:1USA
Date:Aug 18, 2001
Words:227
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