Del Frisco’s is reviewing a potential sale

The company, facing activist pressure, said it is considering strategic alternatives.
Photograph courtesy of Barcelona Wine Bar

Del Frisco’s Restaurant Group, facing shareholder pressure and a falling stock price, said on Thursday that it would consider strategic alternatives, including a possible sale of the company.

The Irving, Texas-based operator of the upscale steak chain Del Frisco’s Double Eagle said it would consider “a full range of options focused on maximizing shareholder value, including a possible sale of the company or any of its dining concepts.”

“The board believes that conducting a strategic review process is in the best interests of shareholders,” Ian Carter, the company’s chairman, said in a statement. He said the board “continues to support the company’s existing strategic priorities” and that the company’s “exceptional collection of dining concepts will serve as the foundation for continued growth.”

Del Frisco’s is the third restaurant chain, following Papa Murphy’s Pizza  and Jack in the Box, to say it is exploring a potential sale. Papa John’s has also been talking with potential buyers, amid an especially active period for restaurant mergers and acquisitions.

Earlier this month, activist investor Engaged Capital urged Del Frisco’s to put itself up for sale, saying such a move would be less risky given “strategic missteps” by the company’s board and management—and especially given sales and traffic challenges for Del Frisco’s and Del Frisco’s Grille.

The company’s stock price declined slightly in after-hours trading. Del Frisco’s stock price has lost nearly 60% of its value this year.

The pressure comes just months after Del Frisco’s purchase of Barcelona Wine Bar and Bartaco and its sale of the struggling Sullivan’s Steakhouse.

Piper Jaffray & Co. is Del Frisco’s financial adviser, and Kirkland & Ellis is its legal adviser. The company’s board said that it has formed a transaction committee to work on the evaluation, and said “there can be no assurance” the effort will result in a transaction.

Del Frisco’s operates 73 restaurants in 16 states.

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