Vintage Capital is offering Red Robin a cash bid of $461.4 million to effectively take over the company. The investor currently controls 12 percent of the company’s stock.
Earlier this month, Red Robin adopted a short-term shareholder rights plan known as a poison pill. The plan temporarily forestalls investors from acquiring full control of a company via the stock market. The move was almost certainly intended to prevent Vintage Capital Management from gaining control of the company by acquiring shares.
Former Red Robin CEO Denny Marie Post retired in April. Board Chair Pattye Moore is currently serving as the interim CEO while consulting service The Elliott Group searches for a replacement.
Vintage Capital urged Red Robin in a letter to auction the casual-dining chain, and reiterated its interest in acquiring the company. “We have very little confidence,” notes the filing, “that the current board will be able to attract a suitable new leader for the company.”
In a statement, Red Robin expressed confusion over Vintage Capital’s claims. “We were surprised by the content of the letter we received today, as Vintage has not been willing to propose any CEO candidates.” The statement concludes affirming that “The board would of course consider any bona fide offer made by Vintage.”
Red Robin has struggled to find its footing. The chain’s stock value halved over the past year. Its unit growth has been on pause since 2018, shortly after the closure of its fast casual brand Burger Works. Red Robin is known to have a “mall problem”: of the chain’s 572 units, 76 are in enclosed malls and facing serious sales concerns. And with a significant decrease in dine-in customers, the company announced in May that it will be closing ten of those restaurants.