Officials of W.R. Grace Co. said Wednesday that they have canceled a deal to sell 181 fast-food Mexican restaurants to Del Taco Inc. because the Costa Mesa taco chain could not obtain financing necessary for the purchase.
Fred Bona, Grace's vice president of corporate communication, would not give reasons why financing for the deal--which was to have been completed by Wednesday--fell through. But he said the two companies are continuing talks in an attempt to work out a new agreement for the purchase of 120 Del Taco outlets now operated by Grace and for the company's 81% interest in the 61-restaurant Taco Villa operation, a Dallas-based restaurant chain.
The original agreement called for privately owned Del Taco to pay $34 million--$4.85 a share--for Grace's 81% interest in Taco Villa and contained a provision for Taco Villa's public shareholders to receive an additional $7.9 million for their stake in the company, Grace officials said.
Del Taco corporate offices were closed Wednesday, and most of the company's top executives could not be reached for comment.
But President Wayne W. Armstrong said in an interview last week that he expected the acquisition to close by the end of the calendar year.
And William Coulter, Del Taco's marketing director, said in a telephone interview from his Newport Beach home that the company's inability to find financing for the Taco Villa acquisition was surprising news to him.
Bona was quick to point out that the lapse of Del Taco's acquisition agreement is not related to the pending sale of Grace's Irvine restaurant division, which operates such eatery chains as Coco's, Baxter's and Charlie Brown's.