California Pizza Kitchen Files for Stock Offering

California Pizza Kitchen Inc., owner and franchiser of 112 pizza restaurants, filed for an offering of 3.4 million common shares, including sales by its co-chairmen and other big shareholders.

The Los Angeles-based company filed with the Securities and Exchange Commission to sell 200,000 of the shares, raising funds for general purposes. Investors and executives plan to sell the other 3.2 million shares.

Co-Chairman Larry Flax, 58, is selling 351,237 of the shares, worth $8.7 million at current market prices. The sale would cut his current 8.5% stake to 6.3% with about 1.2 million shares, the filing said.

Richard Rosenfield, 55, the company’s other co-chairman, plans to offer 356,133 shares, which would reap about $8.9 million at today’s stock price. The transaction would reduce his holdings from 7.9% to 5.8% with 1.1 million shares, according to the filing.

The two co-founders gave up their law practice to open the first California Pizza Kitchen in 1985 in Beverly Hills.

The company’s shares fell $3.38 to close at $24.88 on Nasdaq, a 12% drop on the day.

Restaurant stocks, particularly the so-called casual-dining sector that includes California Pizza Kitchen, benefited last year as investors sought refuge from the battered technology sector.

Industry observers say the number of Americans eating at casual-dining establishments three or more times in a month climbed from 61% in the first half of 1998 to 63.3% in the first half of 2000. The average spending per person during that same period rose 4.6% to $12.39.

Other sellers listed in the filing include Furman Selz SBIC, a New York unit of ING Groep of the Netherlands, with 452,400 shares worth $11.3 million at Tuesday’s price.

California Pizza Kitchen hired Banc of America Securities and Deutsche Bank Alex. Brown, the investment banks that managed its initial public offering, to underwrite the secondary offering filed Tuesday, along with FleetBoston Robertson Stephens Inc. and U.S. Bancorp Piper Jaffray Inc.

Bruckmann, Rosser, Sherrill & Co., the company’s top investor with a 25% stake, plans to sell about 1.6 million shares, now worth $39 million. The Greenwich, Conn.-based firm would retain a 16% stake with 2.9 million shares, the filing said.

The investor, which also owns Au Bon Pain Co. and Il Fornaio Corp. restaurant chains, bought a controlling stake in California Pizza Kitchen from PepsiCo Inc. in 1997.

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Raising Dough

Though its stock lost 12% in Tuesday’s trading, California Pizza Kitchen has enjoyed big gains since going public in August. Shares are 66% above the IPO price of $15. The company plans to sell an additional 200,000 shares to the public.

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CPKI, weekly closes and latest on Nasdaq

Tuesday: $24.88, down $3.38

Source: Bloomberg News