Mergin’ good in the neighborhood – Ihopplebees in the works

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Analysts remain skeptical, and scared, over yesterday’s announcement that IHOP offered $2bn for Applebees. Some analyst comments:
“The merger will never go through for antitrust reasons. The resulting chain would be too American, and therefore subject to a host of patent violations."
"A combination of IHOP and Applebees would be an unstoppable force in the American suburb. People wouldn't leave, and the branches would develop into self-sufficient communities like the Arcologies in SimCity 2000 or the Bio-Dome invented by Pauly Shore or your average Wal Mart Super Center.”
“If you thought soccer moms were dangerous now or that ratings of Two and a Half Men were artificially inflated, just wait until IHOP buys Applebees. I don’t think the result will be a society any of us want to live in.”
“The last thing your inspirational high school indoor track assistant coach needs is a stack of pancakes to soak up his tears after learning that his picture made the restaurant wall. That’s what a $16 barrel of oriental chicken salad is for.”
“America is not ready for a Pancake and Riblet Platter.”
Aside from anti-trust and national security reasons, analysts are concerned that Ihopplebees will have operational issues. The two chains have different business models, with Applebees the more active restaurant operator. IHOP is a franchisor of all but 10 of its 1,306 locations while Applebees owns 500 of its 1,900 locations.
Applebees has been up for grabs since February after years of crap performance. IHOP is quite sick of its penchant for flapjackery and has been trying to buy another restaurant chain for years. IHOP hasn’t made any moves yet mostly due to PE firms and nutty target valuations.
Both chains are experiencing plunging profits on growing or flat sales. IHOP skipped 10% in reverse in Q1 on 2% revenue growth and Applebees reported a 65% profit plunge on flat sales.
Reported bid for Applebee's spurs skepticism [Los Angeles Times]

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