Less than a week after calling for the auction of Red Robin, activist shareholder Vintage Capital is pushing for further leadership changes. Vintage, which holds 1.5 million shares or about 12 percent of Red Robin's stock, called for a special meeting of shareholders in order to remove board members in a SEC filing.
Even though Red Robin promptly responded to the letter, outlining how it plans to get the company back on track, no announcement was made about when those strategies will begin. Vintage isn’t satisfied with the response, it said. The company wrote that Red Robin has yet to release a plan to help explore ways to strategically add value back to the brand and, in turn, attract more qualified candidates to fill in the open chief executive officer position—Denny Marie Post retired in April.
In the latest filing, Vintage called for the removal of five board members. Vintage plans on replacing those board members with “highly qualified directors who, in accordance with their fiduciary duties, would be directed to promptly commence a comprehensive review of strategic alternatives, including a sale of the company,” Vintage said in the letter.
If Red Robin proposes a strategic plan and changes commence before June 29, Vintage said it would withdraw its request for the special meeting. In this situation, Vintage would work with Red Robin to ensure the sale of the company is transparent and fair to shareholders. If Red Robin begins this process on June 29, Vintage will cease the pursuit of a sale for 90 days.
“We once again call on the Board to act in a manner that is consistent with its stated objective of ‘enhancing stockholder value,’” Vintage said in the letter. “If the board is truly ‘open to all opportunities to create value,’ then it should immediately engage with Vintage on the terms outlined above and announce the commencement of, and diligently pursue, an auction process.”
Red Robin has some say when it comes to scheduling the special meeting. However, Vintage cautioned the burger chain not to delay it too long or more action against the board will be taken. Vintage said, “If the company has not provided notice to stockholders of the date of the special meeting promptly following the date of this letter [which special meeting shall be held within 60 days of such date], then Vintage will have no choice but to conclude that the company does not have a good-faith intent to call the special meeting in a timely manner and Vintage will seek to enforce any and all rights under applicable law and otherwise.”