Activist To Get Seat On Famous Dave's Board
By Jonathan Maze, February 4, 2013
If you can’t beat them, put them on your board so you won’t have to bother. That’s what Minneapolis-based Famous Dave’s is doing with its activist, Patrick Walsh. The barbecue chain said today that it has agreed to place Walsh among its slate of director nominees, so long as he doesn’t buy up too much stock.
In exchange for his place among the company’s director nominees, Walsh has agreed not to buy more than 12.9 percent of Famous Dave’s stock. Walsh currently controls 9.6 percent of company stock.
Famous Dave’s just happened to have an opening on its board with the decision to demote CEO Christopher O’Donnell to chief operating officer. So Famous Dave’s will nominate Walsh for the board seat that O’Donnell will vacate this year.
Walsh's Atlas Fund nominated him to the board late last year. Walsh has a habit of targeting restaurants with his activist investments, having launched proxy fights against restaurant companies. He was among the group that had targeted Denny’s in 2010, and Walsh and David Makula targeted Red Robin in 2011. Denny’s won its proxy fight, but Red Robin placed Makula on its board before the election.
In this case, Dave’s didn’t bother letting Walsh take the fight far at all, choosing to let him have a seat on the board rather than letting the issue go before shareholders.
Dave’s could probably use the new blood. The company’s stock has been hanging in the high single digits for the past two years. Its same-store sales last year fell 1.8 percent for company owned restaurants, including a 6-percent decline in the fourth quarter. But net income and EBITDA both decreased last year.<< back