Bloomin’ Brands has agreed to serve as the lead bidder to buy substantially all the assets of Out West Restaurant Group, an independent franchisee operating 61 Outback Steakhouse restaurants in the western United States. The deal is part of Out West’s Chapter 11 bankruptcy process; Bloomin’ Brands is also proposing up to $5.5 million in interest-free financing to help the restaurants keep operating while the case proceeds.
The purchase is not final. It requires bankruptcy-court approval and could be displaced by a higher or otherwise better offer.
Key details
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Proposed purchase price: Bloomin’ Brands’ bid is $26.3 million, reduced by any amounts Out West draws under the proposed financing. The price would increase dollar for dollar if specified vendor liabilities assumed by Bloomin’ Brands are less than $6.1 million; there is no such increase if those liabilities reach or exceed $6.1 million.
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Liabilities included: In addition to the cash price, Bloomin’ Brands would assume certain obligations, including future lease obligations, unredeemed gift cards and specified vendor liabilities.
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Bankruptcy auction process: Bloomin’ Brands expects to be designated the “stalking horse” bidder, setting an initial offer for the assets. Other qualified bidders may submit competing offers, and an auction may follow. The sale also needs court approval and must satisfy other conditions.
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Timing: The purchase agreement sets January 31, 2027, as the outside closing date, unless extended under its terms.
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Financing for Out West: Bloomin’ Brands has proposed up to $5.5 million of financing, with no interest. If approved by the court and other conditions are met, Out West could draw $1.5 million after interim approval and the balance after final approval and approval of bidding procedures. The funds would cover ordinary operating and bankruptcy-related costs only when cash from operations is insufficient to maintain minimum liquidity.
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Financing repayment and deadline: Amounts drawn would be repaid through a reduction in Bloomin’ Brands’ purchase price, or from proceeds if another buyer acquires the assets. Repayment could also be triggered earlier by a default or termination of the financing. Out West’s ability to use its operating cash is stated to run only through January 4, 2027; the financing would terminate then unless the asset sale has closed or lenders extend the date.
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Restaurant operations: Out West said the bankruptcy has no immediate effect on guests, restaurant employees or day-to-day operations. It plans to continue operating during the case and to pay post-bankruptcy franchise fees and royalties to Bloomin’ Brands, as well as rent on leases guaranteed by Bloomin’ Brands.
Plain-English implications
Bloomin’ Brands is seeking to take direct ownership of the 61 restaurants, but the bankruptcy bidding process means it is not assured of winning them. The proposed financing is intended to support continued operations in the meantime, and any amount drawn would reduce the price Bloomin’ Brands pays if its bid closes. The transaction would also bring certain lease, gift-card and vendor obligations onto Bloomin’ Brands’ books.