SAN FRANCISCO, May 30, 2017 /PRNewswire/ -- Marcato Capital
Management LP ("Marcato"), a San
Francisco-based investment manager which manages funds that
beneficially own approximately 9.9% of the outstanding common
shares of Buffalo Wild Wings, Inc. (NASDAQ: BWLD) ("Buffalo Wild
Wings" or the "Company"), today released an open letter to Buffalo
Wild Wings shareholders urging them to return Buffalo Wild Wings to
a path of growth and equity value creation by voting the
WHITE proxy card TODAY FOR the election of
Marcato's highly-qualified director nominees – Scott Bergren, Sam
Rovit, Lee Sanders and
Mick McGuire – in connection with
Buffalo Wild Wings' Annual Meeting on June
2, 2017.
Marcato's letter to BWLD shareholders can be found below and at
www.WinningAtWildWings.com.
Dear Fellow Buffalo Wild Wings Shareholders:
Buffalo Wild Wings' June
2nd Annual Meeting is just around the corner and
we are seeking your vote in this critical election.
In just a few days, shareholders will have the chance to
reinvigorate the Buffalo Wild Wings Board by voting the
WHITE proxy card in favor of ALL FOUR of Marcato's
highly-qualified director nominees – Scott
Bergren, Sam Rovit,
Lee Sanders and Mick McGuire – who, if elected, pledge to bring
the independent perspectives and oversight required in the
boardroom to generate meaningful, long-term value for BWLD
shareholders.
We greatly appreciate the support we have received from so many
of you as well as from the leading independent proxy advisory
firms, ISS and Egan-Jones*. Your support is essential. We urge all
shareholders to support our FOUR nominees so that together we
can make Buffalo Wild Wings a winning company again.
LEADING PROXY ADVISORY FIRMS ISS AND
EGAN-JONES AGREE:
FURTHER CHANGE IS WARRANTED IN THE
BWLD BOARDROOM
ISS's and Egan-Jones' independent recommendations that BWLD
shareholders vote Marcato's WHITE proxy card further
underscores our view that new voices and fresh perspectives are
urgently needed on the BWLD Board to ensure BWLD reaches its full
potential as both a company and in terms of shareholder value. ISS
and Egan-Jones recognize that the BWLD Board would benefit from the
experience and skills of Marcato's director candidates, who, if
elected, would bring increased accountability and independence to
the Board.
ISS ACKNOWLEDGES THAT BWLD HAS "LOST ITS WAY"
AND THAT
"INCREASED SHAREHOLDER OVERSIGHT" IS
NECESSARY AT THE BOARD LEVEL
In making its recommendation, ISS* noted:
- "[T]he dissident – whose campaign appears to have instilled a
greater sense of urgency to the board – has presented a compelling
case that additional change is warranted at this time."
- "[I]ncreased shareholder oversight would be a powerful tool to
ensure that the board increases its accountability and avoids any
delays in the implementation of strategic projects. In that sense,
it appears prudent to add McGuire, who represents the company's
third largest shareholder, to the board."
- "[O]ver the past two years it appears that the company has lost
its way. Facing traffic problems, which were aggravated by
management's decision to pass cost increases to consumers in 2015,
the company appears to have decided in 2016 to sustain top line
growth with store acquisitions and promotional activities. As a
result of these efforts, both adjusted EBITDA margin and return on
invested capital declined over this period—the opposite of what
happened to the majority of the company's casual dining peers over
the same period."
EGAN-JONES' RECOMMENDATION HIGHLIGHTS THE
STRENGTH OF ALL FOUR OF MARCATO'S HIGHLY-QUALIFIED NOMINEES
We believe ALL FOUR of our highly-qualified nominees
bring the skills, experience and qualifications in the restaurant
and financial business that are needed to address the Company's
underperformance and make Buffalo Wild Wings a winning company
again. We are particularly pleased that Egan-Jones agrees with this
sentiment – endorsing ALL FOUR of our director candidates.
In its report, Egan-Jones emphasized the merits of our nominees as
well as the declining performance of BWLD under current
leadership:
- "We believe that the dissident shareholders' nominees, if
elected, will make significant contributions to the Company as
evident in their skills, experience and qualifications in the
restaurant and financial business and will be highly committed in
working with the incumbent members of the Board and
management."
- "We believe that Marcato's business plan for BWLD, such as
strengthening of the franchisees and openness to pursue strategic
alternatives (M&A), would maximize and unlock shareholder value
in the long run."
- "We believe that the Company's current leadership under CEO
Sally Smith has failed to maximize
BWLD's full potential depicted by the status quo of decreased
customer satisfaction, underperformance, declining returns on
investments and business expansions to name a few."
We urge shareholders to follow Egan-Jones' analysis by voting
the WHITE proxy card TODAY.
WE BELIEVE A VOTE FOR THE INCUMBENT DIRECTORS
IS A VOTE FOR
CONTINUED EQUITY VALUE DESTRUCTION
To us, the upcoming election is not just about a vote on
directors. Ultimately, shareholders are casting a vote for:
- A clear path toward achieving a better Buffalo Wild Wings that
we believe will create long-term value for the benefit of all BWLD
shareholders.
OR
- More of the same or worse – a Buffalo Wild Wings that we
believe will continue to consistently underperform under current
management and ineffective leadership and fail to create value for
shareholders.
The BWLD Board and management team appear to be comfortable with
the status quo – they've fought tooth-and-nail to maintain it –
rejecting Marcato's plan for a franchised-focused business model
that we believe would create significant value for shareholders in
the near- and long-term.
WE BELIEVE FAILURE TO ELECT MARCATO'S NOMINEES
WILL LIKELY RESULT IN SIGNIFICANT BWLD SHARE PRICE DECLINE
But don't just take our word for it. The market has spoken. And
it has spoken more than once. Since first disclosing our investment
in a 13D filing on July 25, 2016,
BWLD's stock price performance has decoupled from 2017 EPS
consensus estimates. We therefore believe that the current share
price reflects Marcato's plans to improve operational and financial
performance at BWLD and is evidence that retaining the
incumbent directors will result in a significant decrease in BWLD's
share price.
Click here to view a chart illustrating why Marcato believes
BWLD's current share price reflects preference for Marcato's
agenda.
Following ISS's recommendation that BWLD shareholders vote the
WHITE proxy card for Marcato's nominees, BWLD's stock
jumped 8%, reinforcing that fresh perspectives are necessary in
the BWLD boardroom. It is clear: the market undoubtedly recognizes
that change is drastically needed on the BWLD Board.
MARCATO HAS A CLEAR PLAN FOR CHANGE AND VALUE
CREATION AT BWLD AND
ITS NOMINEES HAVE THE OWNERSHIP
MENTALITY NEEDED TO IMPLEMENT THIS PLAN
Marcato's plan is simple. We believe there is a readily
accessible opportunity to improve BWLD and create substantial value
for shareholders by:
- Improving "4-Wall" profitability and returns;
- Transitioning to a 90% franchised model; and
- Optimizing the capital structure.
We believe these changes will improve returns on capital and
reduce the cost of capital, thereby creating significant value
for ALL shareholders.
As one of BWLD's largest shareholders, our interests are
directly aligned with yours. Like you, we strongly believe in the
proven BWLD brand and the substantial future potential of the
business. Accordingly, on May 17,
2017, Marcato and our affiliates increased our beneficial
ownership in Buffalo Wild Wings. We are now beneficial owners of
approximately 9.9% of the outstanding shares of BWLD. We
strongly believe that if our nominees – Scott Bergren, Sam
Rovit, Lee Sanders and
Mick McGuire – are elected to the
Board, there is significant upside opportunity.
TIME IS OF THE ESSENCE: VOTE THE WHITE PROXY
CARD TODAY
Marcato encourages all BWLD shareholders to visit
www.WinningAtWildWings.com to review important information about
Marcato's nominees and investment in Buffalo Wild Wings.
MAKE BUFFALO WILD WINGS A WINNING COMPANY
AGAIN.
VOTE YOUR WHITE PROXY CARD TODAY.
Sincerely,
Mick McGuire
Managing Partner
Marcato Capital Management LP
*Marcato has neither sought nor obtained consent from ISS or
Egan-Jones to use previously published information in this press
release.
Your Vote Is
Important, No Matter How Many or How Few Shares You
Own!
Please vote today by
telephone, via the Internet or
by signing, dating
and returning the enclosed WHITE proxy card.
Simply follow the
easy instructions on the WHITE proxy card.
If you have questions
about how to vote your shares, please contact:
INNISFREE M&A
INCORPORATED
Shareholders May
Call Toll-free: (888) 750-5834
Banks and Brokers
May Call Collect: (212) 750-5833
REMEMBER:
Please simply discard
any Yellow proxy card that you may receive from Buffalo Wild Wings.
Returning a Yellow proxy card – even if you "withhold" on the
Company's nominees – will revoke any vote you had previously
submitted on Marcato's
WHITE proxy card.
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FORWARD LOOKING STATEMENTS
The press release may
contain forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, as amended, which
reflect Marcato's views with respect to, among other things, future
events and financial performance. Forward-looking statements
are subject to various risks and uncertainties and
assumptions. There can be no assurance that any idea or
assumption herein is, or will be proven, correct. If one or
more of the risks or uncertainties materialize, or if Marcato's
underlying assumptions prove to be incorrect, the actual results
may vary materially from outcomes indicated by these statements.
Accordingly, forward-looking statements should not be regarded as a
representation by Marcato that the future plans, estimates or
expectations contemplated will ever be achieved.
CERTAIN INFORMATION CONCERNING THE PARTICIPANTS
Marcato International Master Fund Ltd. ("Marcato International"),
together with the other participants in Marcato International's
proxy solicitation, have filed with the Securities and Exchange
Commission (the "SEC") a definitive proxy statement and
accompanying WHITE proxy card to be used to solicit proxies in
connection with the 2017 annual meeting of shareholders (the
"Annual Meeting") of Buffalo Wild Wings, Inc. (the "Company").
Shareholders are advised to read the proxy statement and any other
documents related to the solicitation of shareholders of the
Company in connection with the Annual Meeting because they contain
important information, including information relating to the
participants in Marcato International's proxy solicitation. These
materials and other materials filed by Marcato International with
the SEC in connection with the solicitation of proxies are
available at no charge on the SEC's website at http://www.sec.gov.
The definitive proxy statement and other relevant documents filed
by Marcato International with the SEC are also available, without
charge, by directing a request to Marcato International's proxy
solicitor, Innisfree M&A Incorporated, toll-free at (888)
750-5834 (banks and brokers may call collect at (212)
750-5833).
The participants in the proxy solicitation are Marcato
International, Marcato Capital Management LP, Marcato Special
Opportunities Master Fund LP ("Marcato Special Opportunities
Fund"), Emil Lee Sanders,
Richard T. McGuire III, Sam Rovit and Scott O.
Bergren (collectively, the "Participants").
As of the date hereof, Marcato International directly owns
950,000 shares of common stock, no par value, of the Company (the
"Common Stock") and American style call options referencing an
aggregate of 615,000 shares of Common Stock representing
approximately 9.7% of the outstanding shares of Common Stock. As of
the date hereof, Marcato Special Opportunities Fund directly owns
32,600 shares of Common Stock, representing approximately 0.2% of
the outstanding shares of Common Stock.
In addition, Marcato Capital Management LP, as the investment
manager of Marcato International and Marcato Special Opportunities
Fund, may be deemed to have the shared power to vote or direct the
vote of (and the shared power to dispose or direct the disposition
of) the shares of Common Stock directly owned by Marcato
International and Marcato Special Opportunities Fund and the shares
of Common Stock underlying the call options held by Marcato
International and, therefore, may be deemed to be the beneficial
owner of such shares. By virtue of Mr. McGuire's position as the
managing partner of Marcato Capital Management LP, Mr. McGuire may
be deemed to have the shared power to vote or direct the vote of
(and the shared power to dispose or direct the disposition of) the
shares of Common Stock directly owned by Marcato International and
Marcato Special Opportunities Fund and the shares of Common Stock
underlying the call options held by Marcato International and,
therefore, Mr. McGuire may be deemed to be the beneficial owner of
such shares.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/marcato-issues-open-letter-to-buffalo-wild-wings-shareholders-emphasizing-immediate-need-for-change-in-the-bwld-boardroom-300465107.html
SOURCE Marcato Capital Management LP