Vintage Capital Makes an Offer for Red Robin Buyout

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.

Research by:

Paul Barron

Paul Barron

Editor-in-Chief/Executive Producer


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Which Chain Will the Parent Company of Applebee's Acquire?

In a recent interview, Steve Joyce, the Chief Executive Officer of Dine Brands Global Inc., said that the company is looking to acquire a new restaurant chain and is already in talks with a few.

“We’re looking at a number of different concepts,” said Joyce in an interview. “There are several conversations going on right now.”

Dine Brands Global restaurant empire already has thousands of stores including all the IHOP and Applebee’s locations.

The company is likely to acquire a fast casual brand versus another brand in the casual dining space.

"I want a brand within a year," said Joyce to "Business Insider" in May. "We're going to find the right brand and the right opportunity, but more than likely it's going to be fast-casual. We want to get into a category that's growing faster than the categories we're in."

Joyce also said that the company isn't necessarily looking for an already established chain, instead, the company is hoping to grow a regional brand.

“What we bring to that founder is the opportunity to take their dream from a regional brand to a nationwide, and potentially global brand,” said Joyce.

Darden Restaurants Inc. recently invested $780 million to acquire Cheddar’s Scratch Kitchen. Then in May, Del Frisco’s Restaurant Group, the Irving, Texas-based company known for its upscale steakhouses, announced that it would be acquiring Barteca Restaurant Group for $325 million.

The parent company of Arby's– Roark Capital, which also owns Auntie Anne's, Carvel and Jimmy John's, has made two major acquisitions in the last year. First, Roark acquired Buffalo Wild Wings for $2.9 million. Then it announced at the end of September that it would also be acquiring the fast food chain Sonic Drive-in.

Read more about how Dine Brands Global is aiming to make a big acquisition sooner than later at "Bloomberg."

It’s no secret at legacy brands in the casual dining space are struggling in this market. Watch the video below to see the impact millennials have had on this segment.

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