Darden Restaurants (NYSE: DRI), the parent company of the Olive Garden, Longhorn Steakhouse, and Cheddar's restaurant chains, among others, is acquiring upscale steakhouse operator Ruth's Hospitality Group (NASDAQ: RUTH), in a deal valued at about $715 million. Darden stock was essentially flat on the news. However, shares of Ruth's Hospitality were up by a whopping 33.8% as of 12:33 p.m. ET to a level just a few cents shy of the deal price of $21.50 per share.

In late March, on Darden's fiscal 2023 third-quarter conference call, an analyst asked CEO Rick Cardenas about the possibility of making an acquisition. "We'll talk to our board when the right opportunities come to play, and we'll be ready when they do," Cardenas replied. The right opportunity was apparently Ruth's Hospitality.

The deal between these two restaurant companies has already been unanimously approved by both boards of directors. Darden intends to pay the $21.50 per share in an all-cash transaction, and believes it has enough resources that it won't need to seek additional funding. 

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Source Fool.com