SAN FRANCISCO, May 22, 2017 /PRNewswire/ -- Marcato Capital
Management LP ("Marcato"), a San
Francisco-based investment manager which manages funds that
now beneficially own approximately 9.9% of the outstanding common
shares of Buffalo Wild Wings, Inc. (NASDAQ: BWLD) ("Buffalo Wild
Wings" or the "Company"), today published a detailed FAQ that
answers pertinent questions Marcato has received in connection with
its proxy campaign to restore value at Buffalo Wild Wings.
The FAQ ensures BWLD shareholders have the facts about Marcato's
nominees and their qualifications to serve on the BWLD Board in
advance of the important election of directors at BWLD's Annual
Meeting on June 2, 2017. The FAQ also
highlights the urgent need for change on the BWLD Board, and how
Marcato's nominees, if elected, will use their distinct skill sets
to ensure the Company's business strategies translate into
meaningful, long-term value for BWLD shareholders.
The FAQ is available below and here.
1. Why should I support the Marcato nominees?
- Marcato's carefully selected, highly-qualified director
nominees have the extensive restaurant industry operating,
strategic and financial expertise that the incumbent directors do
not possess, and will bring fresh perspectives and robust oversight
to Buffalo Wild Wings' Board.
- Importantly, Marcato's nominees, if elected, pledge to work
with the incumbent directors to ensure that the Company's business
strategies translate into meaningful, long-term value for BWLD
shareholders.
- If elected, Marcato's nominees will be intensely focused
on:
-
- Reinvigorating the Buffalo Wild Wings brand;
- Recapturing neglected operating margin opportunities;
- Establishing a sound capital allocation framework;
- Implementing a coherent and capital efficient franchising
strategy; and
- Realigning management incentives.
2. Why should I vote for all four of Marcato's
nominees?
- Marcato's nominees bring distinct skill sets that the incumbent
directors lack, and which would benefit the BWLD Board.
-
- Mr. Bergren, a best-in-class casual dining executive, brings
global restaurant brand management experience, significant food and
concept innovation expertise, and a unique operational perspective,
having served in senior operating roles at one of the world's
largest restaurant companies, YUM! Brands. In addition, if elected,
he would be the only former CEO of a global casual dining
restaurant company to serve on the Board.
- Mr. Rovit, a recognized expert in corporate transformation with
deep knowledge of global food and restaurant companies, has served
as both a management consultant and senior operating executive and
currently is President and Chief Executive Officer of CTI
Foods.
- Mr. Sanders, a seasoned restaurant and franchise industry
executive, brings significant operational and strategic planning
experience, having previously served at companies including Buffalo
Wild Wings, TGI Fridays, Johnny Rockets Group, Dunkin' Brands,
General Mills, Inc., Frito-Lay and Kraft. In addition, if elected,
he would be the only director with full-service bar, international
casual dining development and franchising experience at multiple
casual dining restaurant concepts as well as the only director with
intimate knowledge of the BWLD franchise system.
- Mr. McGuire, one of Buffalo Wi2ld Wings' largest investors, is
a sophisticated investment professional committed to ensuring that
boards of directors and corporate executives employ frameworks and
strategies that maximize long-term shareholder value.
3. What does having a shareholder on the Board
add?
- Having a shareholder on the BWLD Board brings an ownership
mentality to the boardroom.
- Marcato believes the incumbent directors have insufficient
economic interest in BWLD and that the Company would benefit from
oversight by directors with more capital at risk.
- Marcato has the capability to provide independent research and
analysis to support intelligent and fully-informed decision
making. Today, the Board is limited to information provided
by management or by financial advisors.
4. There has already been change on the BWLD
Board, why is more warranted?
- BWLD's current Board continues to lack the casual dining
restaurant experience that is needed to return Buffalo Wild Wings
to a path of profitable growth.
- There are no casual-dining operators on BWLD's current Board,
nor any on their proposed slate.
-
- Scott Bergren, former CEO of
YUM! Brands' Pizza Hut business; Lee
Sanders, experienced franchise industry executive having
worked at TGI Fridays, Johnny Rockets Group and Dunkin' Brands; and
Sam Rovit, President and CEO of CTI
Foods, possess the strategic, financial and operating expertise to
help solve the Company's persistent failings.
- BWLD's incumbent directors have endorsed and celebrated
management decisions that have reduced shareholder value,
including:
-
- Buying in franchisees at premium multiples to mask declines in
organic revenue and earnings growth;
- Rejecting the merits or feasibility of a highly-franchised
business model despite validation by numerous industry
experts;
- Selling underperforming restaurants as a backdoor way of
improving margins, rather than addressing the operational issues
directly; and
- Relying on discounting to drive traffic and sales in the
short-term at the expense of profits and brand sustainability.
- The incumbent directors have a negligible economic interest in
BWLD, and in Marcato's view, are therefore unable to provide the
oversight and accountability that shareholders deserve.
-
- Mr. McGuire, one of Buffalo Wild Wings' largest investors, is a
sophisticated investment professional committed to ensuring that
boards of directors and corporate executives employ frameworks and
strategies that maximize long-term shareholder value.
5. Are there any conflicts of interest between
Marcato's nominees and BWLD?
- There are no conflicts of interest with Marcato's nomination of
any of its nominees to the BWLD Board.
-
- Marcato's nominees have not and do not seek to act as a
principal in any investment in Buffalo Wild Wings'
restaurants.
6. Have Marcato's nominees ever provided
consulting advice to Buffalo Wild Wings or its franchisees?
- Marcato's nominee, Mr. Sanders', primary occupation is a
third-party consultant largely for private equity and family office
clients that pursue investments in a wide variety of restaurant
concepts and brands, including Buffalo Wild Wings. Mr.
Sanders provided professional consulting advice on one occasion to
a Buffalo Wild Wings franchisee in 2015, Food Management Partners,
who sold 41 existing units to Buffalo Wild Wings.
-
- This does not in any way represent a conflict of interest, nor
does it or should it impair his ability to serve as a director of
BWLD.
- Prior to Marcato's nominating Mr. Sanders to the BWLD Board,
Mr. Sanders agreed that, if elected, he would cease all consulting
activities related to Buffalo Wild Wings, thereby precluding any
potential or perceived future conflicts of interest.
- As a Board member, Mr. Sanders will also cease offering or
providing consulting services to casual dining brands which might
be a conflict of interest to Buffalo Wild Wings. These
competitors are clearly defined in the Buffalo Wild Wings Franchise
Disclosure Document.
7. Do any of Marcato's nominees own a Buffalo
Wild Wings restaurant or any other restaurant concepts?
- None of Marcato's nominees are a franchisee owner, or investor,
in any Buffalo Wild Wings.
- Marcato's nominee, Mr. Sanders, is a franchisee of Golden Chick
Quick Service Restaurant units, but this in no way conflicts him to
serve on the BWLD Board. To the contrary, having a current
understanding of consumer trends and innovation in areas of food,
technology, and customer service will bring significantly more
value to the BWLD Board than the other directors with no direct
knowledge of the restaurant industry.
Marcato encourages all BWLD shareholders to visit
www.WinningAtWildWings.com to review the FAQ and additional
information about Marcato's investment in Buffalo Wild Wings.
Your Vote Is Important, No Matter How Many or How Few
Shares You Own!
Please vote today by
telephone, via the Internet or by signing, dating and returning the enclosed
WHITE proxy card. Simply
follow the easy instructions on the WHITE proxy card.
If you have questions about
how to vote your shares, please contact:
INNISFREE M&A
INCORPORATED Shareholders May Call Toll-free: (888)
750-5834 Banks and
Brokers May Call Collect: (212) 750-5833
REMEMBER: Please simply discard any Yellow proxy card that you
may receive from Buffalo Wild Wings. Returning a Yellow proxy card
– even if you "withhold" on the Company's nominees – will revoke
any vote you had previously submitted on Marcato's
WHITE proxy card.
|
FORWARD LOOKING STATEMENTS
The press release may contain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, as amended, which reflect Marcato's views with respect to,
among other things, future events and financial performance.
Forward-looking statements are subject to various risks and
uncertainties and assumptions. There can be no assurance that
any idea or assumption herein is, or will be proven, correct.
If one or more of the risks or uncertainties materialize, or if
Marcato's underlying assumptions prove to be incorrect, the actual
results may vary materially from outcomes indicated by these
statements. Accordingly, forward-looking statements should not be
regarded as a representation by Marcato that the future plans,
estimates or expectations contemplated will ever be achieved.
CERTAIN INFORMATION CONCERNING THE PARTICIPANTS
Marcato International Master Fund Ltd. ("Marcato
International"), together with the other participants in Marcato
International's proxy solicitation, have filed with the Securities
and Exchange Commission (the "SEC") a definitive proxy statement
and accompanying WHITE proxy card to be used to solicit proxies in
connection with the 2017 annual meeting of shareholders (the
"Annual Meeting") of Buffalo Wild Wings, Inc. (the "Company").
Shareholders are advised to read the proxy statement and any other
documents related to the solicitation of shareholders of the
Company in connection with the Annual Meeting because they contain
important information, including information relating to the
participants in Marcato International's proxy solicitation. These
materials and other materials filed by Marcato International with
the SEC in connection with the solicitation of proxies are
available at no charge on the SEC's website at http://www.sec.gov.
The definitive proxy statement and other relevant documents filed
by Marcato International with the SEC are also available, without
charge, by directing a request to Marcato International's proxy
solicitor, Innisfree M&A Incorporated, toll-free at (888)
750-5834 (banks and brokers may call collect at (212)
750-5833).
The participants in the proxy solicitation are Marcato
International, Marcato Capital Management LP, Marcato Special
Opportunities Master Fund LP ("Marcato Special Opportunities
Fund"), Emil Lee Sanders,
Richard T. McGuire III, Sam Rovit and Scott O.
Bergren (collectively, the "Participants").
As of the date hereof, Marcato International directly owns
950,000 shares of common stock, no par value, of the Company (the
"Common Stock") and American style call options referencing an
aggregate of 615,000 shares of Common Stock representing
approximately 9.7% of the outstanding shares of Common Stock. As of
the date hereof, Marcato Special Opportunities Fund directly owns
32,600 shares of Common Stock, representing approximately 0.2% of
the outstanding shares of Common Stock.
In addition, Marcato Capital Management LP, as the investment
manager of Marcato International and Marcato Special Opportunities
Fund, may be deemed to have the shared power to vote or direct the
vote of (and the shared power to dispose or direct the disposition
of) the shares of Common Stock directly owned by Marcato
International and Marcato Special Opportunities Fund and the shares
of Common Stock underlying the call options held by Marcato
International and, therefore, may be deemed to be the beneficial
owner of such shares. By virtue of Mr. McGuire's position as the
managing partner of Marcato Capital Management LP, Mr. McGuire may
be deemed to have the shared power to vote or direct the vote of
(and the shared power to dispose or direct the disposition of) the
shares of Common Stock directly owned by Marcato International and
Marcato Special Opportunities Fund and the shares of Common Stock
underlying the call options held by Marcato International and,
therefore, Mr. McGuire may be deemed to be the beneficial owner of
such shares.
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SOURCE Marcato Capital Management LP