Red Robin Gourmet Burgers, Inc. Adopts Short-Term Shareholder Rights Plan
June 05 2019 - 8:00AM
Business Wire
Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB) (“Red Robin” or
the “Company”), a full-service restaurant chain serving an
innovative selection of high-quality gourmet burgers in a
family-friendly atmosphere, today announced that its Board of
Directors has unanimously adopted a short-term shareholder rights
plan (“the Rights Plan”) following the Board’s evaluation and
consultation with the Company’s advisors.
The Rights Plan is similar to plans adopted by other publicly
traded companies and is intended to enable all Red Robin
shareholders to realize the value of their investment and protect
Red Robin from any efforts to obtain control of the Company that
are inconsistent with the best interests of its shareholders while
Red Robin completes its ongoing CEO search and executes on its
strategic plan to position the Company for significant, sustained
shareholder value creation and long-term success.
Red Robin remains committed to engaging in constructive dialogue
with its shareholders. The Board adopted the Rights Plan to deter
any entity, person or group from gaining control of Red Robin
through the open market or private transactions without paying an
appropriate control premium or offering fair and adequate value to
all shareholders. It is intended to enable Red Robin shareholders
to realize the value of their investment in the Company, ensure all
shareholders receive fair treatment, and provide the Board and
shareholders with adequate time to make informed decisions. The
Rights Plan is not intended to deter offers that are fair and
otherwise in the best interests of the Company’s shareholders.
Pursuant to the Rights Plan, the Company’s Board is issuing one
preferred stock purchase right for each current share of common
stock outstanding at the close of business on June 14, 2019.
Initially, these rights will not be exercisable and will trade with
the shares of the Company’s common stock.
Under the Rights Plan, the rights will generally become
exercisable if a person or group acquires beneficial ownership of
10% or more of the Company's common stock (20% or more in the case
of passive institutional investors, as described in the Rights
Plan). In that situation, each holder of a right (other than such
person or members of such group, whose rights will become void and
will not be exercisable) will be entitled to purchase, at the
then-current exercise price, additional shares of common stock
having a value of twice the exercise price of the right.
The Board, at its option, may exchange each right (other than
rights owned by the triggering person or group that have become
void) in whole or in part, at an exchange ratio of one share of
common stock per outstanding right (or equivalent security),
subject to adjustment.
Persons or groups that beneficially own 10% or more of the
Company’s outstanding common stock (20% in the case of passive
institutional shareholders) prior to the Company’s announcement of
the Rights Plan will not cause the rights to be exercisable until
such time as those persons or groups become the beneficial owner of
any additional shares of the Company’s common stock.
The Company's Board may redeem the rights for $0.001 per right
at any time before the rights become exercisable. Under the terms
of the Rights Plan, the rights will expire on June 2, 2020.
Additional details regarding the Rights Plan will be contained
in a Form 8-K to be filed by the Company with the U.S. Securities
and Exchange Commission on June 5, 2019.
Evercore is serving as financial advisor to Red Robin and Paul,
Weiss, Rifkind, Wharton & Garrison LLP is serving as its legal
counsel.
About Red Robin Gourmet Burgers, Inc.
Red Robin Gourmet Burgers, Inc. (www.redrobin.com), a casual
dining restaurant chain founded in 1969 that operates through its
wholly-owned subsidiary, Red Robin International, Inc., and under
the trade name Red Robin Gourmet Burgers and Brews, is the Gourmet
Burger Authority™, famous for serving more than two dozen
craveable, high-quality burgers with Bottomless Steak Fries® in a
fun environment welcoming to Guests of all ages. Whether a family
dining with kids, adults grabbing a drink at the bar, or teens
enjoying a meal, Red Robin offers an unparalleled experience for
its Guests. In addition to its many burger offerings, Red Robin
serves a wide variety of salads, soups, appetizers, entrees,
desserts, and signature beverages. Red Robin offers a variety of
options behind the bar, including its extensive selection of local
and regional beers, and innovative adult beer shakes and cocktails,
earning the restaurant a VIBE Vista Award for Best Beer Program in
a Multi-Unit Chain Restaurant. There are more than 570 Red Robin
restaurants across the United States and Canada, including
locations operating under franchise agreements. Red Robin… YUMMM®!
Connect with Red Robin on Facebook, Instagram, and Twitter.
Forward-Looking Statements
Forward-looking statements in this press release are made under
the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. These statements are based on assumptions
believed by the Company to be reasonable and speak only as of the
date on which such statements are made. Except as required by law,
the Company undertakes no obligation to update such statements to
reflect events or circumstances arising after such date, and
cautions investors not to place undue reliance on any such
forward-looking statements. Forward-looking statements involve
risks and uncertainties that could cause actual results to differ
materially from those described in the statements based on a number
of factors, including but not limited to the following: the
effectiveness of the Company’s strategic initiatives, including the
effectiveness of the Company’s affordability, service improvement,
technology, and off-site initiatives to drive traffic and sales;
the ability to increase labor productivity through alternative
labor models, and to train the Company's workforce for service
execution complexities related to growth of multiple revenue
streams in the restaurant; the success of the Company's
refranchising efforts; and other risk factors described from time
to time in the Company’s Form 10-K, Form 10-Q, and Form 8-K reports
(including all amendments to those reports) filed with the U.S.
Securities and Exchange Commission.
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682-8253
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ReinhardJoele Frank, Wilkinson Brimmer Katcher(212) 355-4449
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