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Del Frisco’s reaches agreement with activist investor

The deal ends the restaurant company’s “poison pill” plan as it continues to explore strategic options.
Photograph courtesy of Del Frisco's

Del Frisco’s Restaurant Group has entered into a cooperation agreement with the activist investor that recently urged the struggling company to put itself up for sale.

The deal with California-based hedge fund Engaged Capital LLC, announced Monday, ends the shareholder rights plan, also known as a “poison pill,” that had been put in place by the Del Frisco’s board late last year.  

The terms also include the addition of businessman Joe Reece to the Del Frisco’s board. Reece will also head a committee to oversee the company’s strategic-option review plan.

Under the agreement, Engaged Capital, which owns 10% of the restaurant company’s shares, must adhere to “certain standstill and voting commitments” until the company’s next annual shareholder’s meeting. Engaged Capital now must vote in favor of any Del Frisco’s nominees and other proposals.

Engaged Capital has been an activist investor almost since its founding in 2012. It pushed Jamba Inc. to appoint two activist shareholders to its board and to close underperforming stores in 2014. In December, it said Del Frisco's performance as a public company had been "abysmal" and urged it to explore sale options. 

Texas-based Del Frisco’s Restaurant Group owns 73 restaurants in 16 states and Washington, D.C., including Del Frisco’s Double Eagle Steakhouse, Del Frisco’s Grille, Barcelona Wine Bar and Bartaco.

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