Red Robin Gourmet Burgers has rejected the call by investor Vintage Capital for a special shareholders meeting to decide the chain’s direction, saying the formal request did not include needed details or proof Vintage actually owns 11.6% of outstanding shares.
In what appeared to be a tweaked form letter, complete with ample fill-in-the-blank spaces, Red Robin said Vintage had failed to provide all the information that is required by the company’s bylaws for an extraordinary meeting of shareholders. A copy of the letter was included in a securities filing by Red Robin.
The communication was a response to Vintage’s ultimatum of June 19 that Red Robin’s board either commence within 10 days a review of “strategic alternatives,” including a possible sale, or call a special meeting where shareholders will vote yea or nay on keeping five of the restaurant company’s nine current directors. The inference was that the new majority on the board would push the company to explore a sale.
Vintage has offered to buy the chain for $40 a share.
Red Robin said Vintage’s demand for a special meeting fell short of several requirements. Specifically, the request did not list which five directors would have their continuation on the board put to a vote, nor who their replacements might be.
It also said that Vintage failed to provide proof that it actually owns 1.5 million Red Robin shares, as the investor professes. “Until such evidence is provided, the company cannot move forward with Vintage’s request to call a special meeting,” reads the letter.
In earlier communications with Vintage, Red Robin’s leadership has expressed its intent to pursue a turnaround strategy built on a number of operational initiatives, including efforts to trim service times, speed table turns on peak nights and bolster off-premise business.
Vintage has yet to respond to Red Robin’s June 26 letter.