Marcato Asks the Wrong Questions and
Provides the Wrong Answers
Buffalo Wild Wings, Inc. (NASDAQ:BWLD), in response to a press
release issued by Marcato Capital Management, L.P. (“Marcato”) on
May 22, 2017, today issued a presentation identifying Marcato’s
continued inaccurate and misleading statements. The presentation is
available at
http://www.buffalowildwings.com/en/2017-annual-meeting/ and will be
filed with the Securities and Exchange Commission (“SEC”).
This Smart News Release features multimedia.
View the full release here:
http://www.businesswire.com/news/home/20170523006319/en/
A selection from the presentation is included in the
accompanying slides:
Before voting at the company’s 2017 Annual Meeting of
Shareholders to be held on June 2, Buffalo Wild Wings believes
shareholders have the right to obtain truthful answers from Marcato
to the following questions:
1. If Marcato is right about a massive refranchising plan,
why has it not even attempted to justify its assumptions and
methodology? Buffalo Wild Wings has identified and publicly
disclosed several important analytical errors or aggressive
assumptions in the cornerstone of Marcato’s plan for Buffalo Wild
Wings. Marcato has now put out a response to Buffalo Wild Wings’
93-page presentation, but has not responded to the company’s
detailed critique of Marcato’s refranchising related assumptions
and modeling.
2. Other than the unprecedented refranchising plan, what
concrete operating suggestions do the Marcato nominees have for
improving the business? Marcato claims its slate of nominees
are experts in casual dining and, even, in Buffalo Wild Wings’
business. Yet, Marcato has offered no operational suggestions for
how to improve the business.
3. How did the company perform so well for shareholders, and
outperform its peers, with a Board that Marcato believes is
inadequate? Buffalo Wild Wings has generated returns for
shareholders of 24% per year, compounded, since its 2003 IPO. Yet,
Marcato claims that the incumbent directors, who sat on the Board
of Directors for some or all of this time, lack any relevant
skills.
4. Why did Marcato purchase puts on nearly its entire
investment in Buffalo Wild Wings – thereby eliminating its downside
– the same day that Buffalo Wild Wings first publicly disclosed the
significant analytical errors in Marcato's refranchising proposal?
Buffalo Wild Wings had previously discussed these errors with
Marcato and Marcato has still not corrected them or justified its
erroneous assumptions.
5. Given Mr. McGuire’s weak performance in the boardroom, why
should shareholders believe Mr. McGuire can create value for them
at Buffalo Wild Wings? During Mick McGuire’s one-year term on
the Board of NCR, no value was created for shareholders. Then, Mr.
McGuire sold his stock. During Mr. McGuire’s directorship at
Borders Group – including when he was Chairman of the Board – the
stock declined precipitously, and the company eventually filed for
bankruptcy.
6. Has Mr. Sanders continued his pattern of misrepresenting
his career and prior actions? Emil Lee Sanders claims in his
biography to have achieved successes while working at Buffalo Wild
Wings that are objectively and demonstrably false. Marcato has not
corrected the errors. Mr. Sanders also sent emails and texts in
which he represented that he was a principal interested in buying
Buffalo Wild Wings restaurant units from franchisees as recently as
February 2017, after he was nominated to the Board of the company
by Marcato. In its recent FAQs, Marcato claims Mr. Sanders was not
trying to buy units himself, but was merely working as a consultant
for others and that his efforts ceased in 2015. The letters and
texts indicate otherwise.
7. What about Mr. Bergren’s career performance should give
Buffalo Wild Wings shareholders comfort that he will add value to
the Buffalo Wild Wings Board? Marcato’s nominee Scott Bergren
was CEO of Pizza Hut US when it materially underperformed its
competitors. Mr. Bergren’s boss, the CEO of Yum! Brands,
specifically called out Pizza Hut’s underperformance on public
conference calls. Subsequently, Mr. Bergren served as CEO of Pizza
Hut Global for just one year before retiring. Yum! Brands then
announced a major restructuring and turnaround of the business.
Buffalo Wild Wings recommends that shareholders vote the
YELLOW proxy card “FOR” the election of all nine of
the Board’s experienced and highly qualified director nominees:
Cynthia L. Davis, Andre J. Fernandez, Janice L. Fields, Harry A.
Lawton, J. Oliver Maggard, Jerry R. Rose, Sam B. Rovit, Harmit J.
Singh and Sally J. Smith.
Lazard Ltd is serving as financial advisor and Faegre Baker
Daniels is serving as legal advisor to the company.
If you have any questions or require any
assistance with voting your shares,please contact the Company’s
proxy solicitor listed below:
MacKenziePartners, Inc.
105 Madison AvenueNew York, New York
10016Call Collect: (212) 929-5500orToll-Free
(800) 322-2885Email:
proxy@mackenziepartners.com
About the Company
Buffalo Wild Wings, Inc., founded in 1982 and headquartered in
Minneapolis, is a growing owner, operator and franchisor
of Buffalo Wild Wings(R) restaurants featuring a variety of
boldly-flavored, made-to-order menu items including its namesake
Buffalo, New York-style chicken wings. The Buffalo Wild
Wings menu specializes in 21 mouth-watering signature sauces
and seasonings with flavor sensations ranging from Sweet BBQ(TM) to
Blazin'(R). Guests enjoy a welcoming neighborhood atmosphere that
includes an extensive multi-media system for watching their
favorite sporting events. Buffalo Wild Wings is the
recipient of hundreds of "Best Wings" and "Best Sports Bar" awards
from across the country. There are currently more than
1,220 Buffalo Wild Wings locations around the world.
To stay up-to-date on all the latest events and offers for
sports fans and wing lovers, like Buffalo Wild
Wings on Facebook, follow @BWWings
on Twitter and visit www.BuffaloWildWings.com.
Cautionary Statement Regarding Certain Information
This communication contains “forward-looking statements” within
the meaning of the federal securities laws. Such statements include
statements concerning anticipated future events and expectations
that are not historical facts. All statements other than statements
of historical fact are statement that could be deemed
forward-looking statements. Actual results may vary materially from
those expressed or implied by forward-looking statements based on a
number of factors, including the factors described under “Risk
Factors” in Part I, Item 1A of our Annual Report on Form 10-K for
the fiscal year ended December 25, 2016, as updated or supplemented
by subsequent reports we file with the SEC. We do not assume any
obligation to publicly update any forward-looking statement after
they are made, whether as a result of new information, future
events or otherwise.
Important Information
Buffalo Wild Wings, Inc., its directors and certain of its
executive officers and employees are participants in the
solicitation of proxies from Buffalo Wild Wings shareholders in
connection with its 2017 annual meeting of shareholders to be held
on June 2, 2017. Information concerning the identity and interests
of these persons is available in the definitive proxy statement
Buffalo Wild Wings filed with the SEC on April 21, 2017.
Buffalo Wild Wings has filed a definitive proxy statement in
connection with its 2017 annual meeting. The definitive proxy
statement, any amendments thereto and any other relevant documents,
and other materials filed with the SEC concerning Buffalo Wild
Wings are (or will be, when filed) available free of charge at
http://www.sec.gov and http://ir.buffalowildwings.com. Shareholders
should read carefully the definitive proxy statement and any other
relevant documents that Buffalo Wild Wings files with the SEC when
they become available before making any voting decision because
they contain important information.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170523006319/en/
Buffalo Wild Wings, Inc.Investor Relations:Heather Pribyl,
952-540-2095orAdditional Investor ContactMacKenzie Partners,
Inc.Bob Marese / Paul Schulman212-929-5500orMediaJoele
Frank, Wilkinson Brimmer KatcherMeaghan Repko / Nick
Lamplough212-355-4449
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