(Adds Buffalo Wild Wings response)
By Michael Flaherty
Feb 6 Activist hedge fund manager Mick McGuire
nominated four directors to serve on the board of Buffalo Wild
Wings Inc, officially launching a proxy fight against
the U.S. restaurant chain.
McGuire, who runs Marcato Capital Management, has publicly
agitated for changes at Buffalo Wild Wings since last July,
demanding that the company franchise more of its restaurants.
Marcato owned 5.2 percent of Buffalo Wild Wings shares as of
Sept. 30, 2016, making it the company's fourth-largest
shareholder. McGuire is among the four people Marcato nominated
to the Buffalo Wild Wings board, which currently has nine
Buffalo Wild Wings said its board will review the slate of
nominees but did not disclose when its annual shareholders'
meeting would be held.
Buffalo Wild Wings, with a market value of around $2.8
billion, caters to a sports crowd, with wide-screen televisions
lining the walls of its dining and bar areas. Servers wear
green-and-yellow sports jerseys with the number '82' on the
sleeve, to commemorate the year the chain was founded.
The company's stock rose 1.3 percent on Monday to $152 per
share, about where it was trading a year ago.
Marcato announced in December that it was entering talks
with the company's franchise owners, saying they could have
better access to innovations and grow more if the hedge fund's
ideas were implemented. Marcato wants the chain to
franchise out nearly all of its restaurants rather than owning
Buffalo Wild Wings says it had 589 franchisee-owned and 601
company-owned restaurants as of Sept. 30, 2016.
Marcato's slate includes Scott Bergen, the former chief
executive of Yum Brands' Pizza Hut, CTI Foods CEO Sam
Rovit, and Lee Sanders, the former global chief development
officer at TGI Fridays.
San Francisco-based Marcato has also asked that Buffalo Wild
Wings' management overhaul how it allocates capital and add
people with relevant restaurant and finance experience to its
management and board ranks.
Buffalo Wild Wings has added three new directors to its
board since last year, including a former Yum Brands chief
financial officer. Last month, it expanded its share repurchase
program by $400 million.
(Additional reporting by Sruthi Ramakrishnan in Bengaluru;
Editing by Maju Samuel and Paul Simao)