Red Robin Board of Directors Unanimously Rejects Unsolicited, Conditional Proposal from Vintage Capital
September 05 2019 - 9:00AM
Business Wire
Red Robin Gourmet Burgers, Inc. (NASDAQ: RRGB) (“Red Robin” or
the “Company”) today announced that its Board of Directors has
unanimously rejected an unsolicited, conditional proposal made on
July 18, 2019 by Vintage Capital Management, LLC (“Vintage”) to
acquire all of the outstanding common shares of Red Robin for
$40.00 per share.
Consistent with its fiduciary duties and in consultation with
its legal and financial advisors, the Red Robin Board carefully
reviewed and considered Vintage’s proposal. The Board unanimously
determined that the proposal undervalues Red Robin and is not in
the best interests of all shareholders, as the strategic plan
currently being implemented by Red Robin positions the Company to
deliver greater long-term value to its shareholders than Vintage’s
proposal. In addition, the Board notes that the Vintage proposal is
conditional and contains uncertainty with respect to likelihood of
completion. The Board and management team also note that they
appreciate the constructive dialogue with Vintage, and look forward
to future engagement with Vintage and all of the Company’s
shareholders as Red Robin continues to focus on driving shareholder
value.
Red Robin’s strategic plan to restore the Company to sustainable
growth and profitability is focused on five strategic priorities
for 2019, including:
- Stabilizing dine-in revenue by reinforcing Red Robin’s
compelling value proposition;
- Continuing to build the To-Go and Catering businesses;
- Improving the Guest experience and recapturing Red Robin’s
known-for “Gift of Time” convenience;
- Implementing digital platforms and restaurant technology
solutions; and
- Selectively refranchising and reassessing the Company’s real
estate portfolio.
These initiatives are already delivering progress, as reported
in the Company’s second quarter 2019 financial results on August
23, 2019. During the second quarter, Red Robin achieved its
strongest comparable restaurant revenue in five quarters, as well
as incremental improvement from the first quarter. The Company’s
customer satisfaction scores are also continuing to rise, with
restaurants in the top quartile generating positive Guest traffic
and sales. In addition, as of the end of the second quarter,
Manager staffing levels reached 99.4%, and hourly turnover
outperformed casual dining industry averages.
The Company separately announced today the appointment of Paul
J.B. Murphy III as President, Chief Executive Officer and a member
of the Board, effective October 3, 2019. Mr. Murphy is a proven
restaurant industry executive who brings more than 30 years of
experience, a unique combination of operational and turnaround
expertise, and an extensive track record of successfully executing
business transformations. This follows the Company’s recent board
changes, which included the addition of three new independent Board
directors with substantial industry experience on August 6, 2019,
and the announcement of three pending board member retirements.
The entire Red Robin Board and management team are laser-focused
on executing the Company’s strategic plan to restore growth and
improve profitability and will continue to act in the best
interests of all shareholders. Additionally, the Board will
continue to review the Company’s strategic priorities and assess
all potential opportunities to create shareholder value.
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
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 560 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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Aura Reinhard Joele Frank, Wilkinson Brimmer Katcher (212)
355-4449
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