Applebees International Inc. (NDAQ:APPB) shares rose $1, or 3.89%, to $26.84 today after the company announced that it has received preliminary takeover offers and would begin a second round of due diligence with bidders before taking final offers. The company also said that it was exploring a recapitalization of the company as a possible alternative to a buyout. The moves come after Applebees settled with dissident shareholders Richard Breeden and his Breeden Capital Management LLC who threatened a proxy fight over board seats. As part of their settlement, the company agreed to explore strategic alternatives back in February. We covered this story in several past articles that outline the hedge funds problems and recommendations for changes at the company.

Now that the company has potential bidders on its doorstep, we can assume that it comes in at a premium higher than the current share price. After all, Applebees is a national chain that both financial and strategic buyers may be interested in turning around. The company was quick to note, however, that it was too early to comment on the likelihood or value of a recapitalization or sale, saying that there was no guarantee that a transaction would occur. Regardless, this is definitely a stock to watch as the company explores its options!

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