Oak Street Capital Management has asked portfolio company Red Robin Gourmet Burgers to appoint its nominees to the company’s board and eliminate the poison pill the restaurant chain adopted in August, Reuters reported. Oak Street and its affiliates own about 13.3% of Red Robin.
(Reuters) – Oak Street Capital Management said it has asked Red Robin Gourmet Burgers Inc (RRGB.O) to appoint its nominees to the company’s board and eliminate the poison pill, which Red Robin adopted in August.
Oak Street and affiliates, which owns about 13.3 percent of the casual dining chain’s outstanding shares, said the company should “allow shareholders to determine the adequacy of all potential offers” by removing the poison pill.
The shareholder group said it was disappointed with the company’s decision to not call a special meeting of the board to discuss the issues it had raised. Oak Street Capital also asked the board to temporarily halt its unit expansion plans until sales improved and to redirect operating cash flow to a $50 million share repurchase program.
Sales at Red Robin have been sluggish, hurt by high unemployment rates in its core markets of California and Arizona. It had ramped up its marketing spend to support the limited-time offer menu items to boost sales.
Earlier this month, Clinton Group Inc, which owns 8.2 percent of Red Robin stock, said in a regulatory filing that the company should “proactively solicit” buyout proposals and eliminate the poison pill.
The Greenwood Village, Colorado-based company’s shares, which have shed nearly 15 percent in the last 52 weeks, closed at $21.22 on Friday on the Nasdaq. (Reporting by Renju Jose in Bangalore; Editing by Roshni Menon)