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Del Frisco’s Restaurant Group shares surge after activist investor pushes for a sale

Activist fund Engaged Capital thinks private equity buyers may have an interest in the restaurant group’s brands, according to a report by the Wall Street Journal
Del Frisco's Grille Sign
The Texas-based restaurant group operates Del Frisco’s Grilles and Double Eagle steakhouses

Del Frisco's Restaurant Group Inc (NASDAQ:DFRG) shares are on the rise after the Wall Street Journal reported that activist hedge fund Engaged Capital LLC is pushing for a sale of the chain.

The Texas-based company operates Del Frisco’s Grilles and Double Eagle steakhouses.

Shares surged nearly 18% to $8 in Thursday afternoon trading.

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Del Frisco’s recently acquired Barteca Restaurant Group, which operates Barcelona Wine Bars and Bartaco restaurants, for $325 million.

Engaged Capital reportedly feels that Del Frisco’s is management leaves much to be desired and its acquisition of Barteca was a rash decision to avoid being acquired.

The hedge fund is confident that private equity buyers would be interested in Del Frisco’s brands, including the newly acquired Barteca restaurants.

Following the WSJ report, Del Frisco’s board reportedly adopted a “poison pill” plan, which dilutes the stock if any shareholder owns more than 10% of the company’s stock.

The report notes that Engaged Capital had pushed Jamba Inc, the company behind smoothie giant Jamba Juice, to sell off some its locations in 2014, followed by the sale of the whole company earlier this year.

 

Contact Lenore Fedow at [email protected]

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