Bloomin' Brands and JANA Partners struck a deal heading into the casual-dining company’s annual meeting.
The parent company of Outback Steakhouse, Carrabba’s, Bonefish Grill, and Fleming’s Prime Steakhouse and Wine Bar, announced Wednesday (February 28) that it has agreed to appoint Wendy A. Beck to its board of directors for a term ending at the company’s 2019 annual meeting. In return, JANA agreed to a customary standstill and voting commitment. Also put, JANA Partners, which owns about 8.7 percent of Bloomin’s outstanding common stock, will support all nominees at the 2018 meeting.
"We expect Wendy will enhance the board's ongoing efforts to create shareholder value by growing the business and advancing key initiatives such as off premise and delivery, improving the cost structure, allocating capital to maximize returns, and evaluating all options to maximize shareholder value,” Jim Craigie, the lead independent director of the board, said in a statement.
JANA announced its stake in Bloomin’ Brands back in November, a move that sent shares skyrocketing more than 12 percent. The company is no stranger to the restaurant industry, and to subsequent major changes. The company took a $134 million stake in Jack in the Box, which sold Qdoba to Apollo Global Management for $305 million in cash. JANA also took a stake in Whole Foods Market earlier in 2017. In that case, like Bloomin’, Jana pushed Whole Foods to explore strategic alternatives. On June 16, Amazon sent a shock wave through foodservice with its $13.7 billion purchase of the supermarket behemoth.
In November, JANA began by revealing in a securities filing under “Purpose of Transaction” that, with the assistance of the other reporting persons, it intends to have discussions with Bloomin’s board of directors and management regarding topics, including “a review of strategic alternatives including exploring a sale” of the company.
Other than selling Bloomin’, strategic alternatives Jana said it would investigate include: “portfolio composition; operating performance and cost management; capital allocation; board composition; and governance.” Jana purchased 7,980,480 shares for an aggregate purchase price of about $137.1 million.
Then in December, Chris Sullivan, one of Outback’s four co-founders, resigned from the board of directors. Sullivan said he would remain a shareholder in Bloomin’ Brands, where he controls 1.2 million shares, or 1.17 percent of the total stock outstanding. He also said he was leaving to “focus on several opportunities that I am currently involved with.”
Beck currently serves as executive vice president and chief financial officer at Norwegian Cruise Line Holdings Ltd. Before that she was EVP and CFO at Domino’s Pizza from 2008–2010. She also held the role of SVP and chief accounting officer and treasurer at Whataburger (2001–2008), and also worked at Checkers Drive-In Restaurants and Lincare Holdings.
“We are pleased to welcome Wendy to the Bloomin' Brands board. Her distinguished career in hospitality and focus on delivering exceptional customer experiences will be a valuable addition. We look forward to her contribution as well as continuing our positive dialogue with JANA Partners,” Liz Smith, the chairman of the board and CEO of Bloomin’ Brands said in a statement.
Added Barry Rosenstein, managing partner of JANA Partners: "We are encouraged by the steps the company is taking, including appointing Wendy, and by the board's ongoing commitment to create shareholder value. We look forward to maintaining a constructive dialogue with the company."
Outback is coming off a stellar fourth quarter where comparable same-store sales rose 4.7 percent versus the prior-year period. Traffic climbed 4.3 percent. As a company, Bloomin’ saw its comps rise 3.3 percent, year-over-year, and traffic grow 1.8 percent.