California Pizza Kitchen Board Authorizes Strategic Review

California Pizza Kitchen Inc.'s (CPKI) board authorized the pizza chain's management to look at strategic alternatives including a possible sale, merger or other combination.

The Wall Street Journal on Friday reported that the casual-dining chain was on the auction block and that the company has been soliciting interest from buyers including private-equity firms.

An improving credit market and a rising stock market have lead to an increase in acquisitions or takeover proposals last year, though corporations and private-equity funds have moved tentatively on billion-dollar deals this year.

The company has hired boutique investment bank Moelis & Co. as its advisor in the review.

The restaurant chain has about 250 outlets in 32 states and nine foreign countries. Revenue dropped 5.8% during the fourth quarter. Sales faltered last year as consumers avoided casual-dining chains amid higher unemployment and a broad recession. While analysts expect California Pizza's sales to drop further during 2010, they are anticipating growth next year and in 2012.

Bruckmann Rosser Sherrill, a well-known investor in restaurants, bought California Pizza in 1997 from PepsiCo Inc. (PEP) and took it public several years later.

-By Tess Stynes, Dow Jones Newswires; 212-416-2481; [e-mail]

(Dennis K. Berman of The Wall Street Journal contributed to this article.)