In a letter to Red Robin's board of directors, Vintage Capital said the company should start a review of strategic alternatives, including an auction process. Vintage, which owns 1.5 million shares, or 11.5% of outstanding shares, said it was willing to bid $40 a share in cash at an auction to buy the rest of Red Robin shares that it didn't already own.
The buyout offer created enough buzz on Wall Street to send Red Robin shares soaring nearly 28% to $32.52.
READ: Red Robin Gourmet Burgers misses Wall Street's fiscal 2Q estimates due to a slowdown in customers
Vintage Capital flexed its muscle saying it wants to call a special board meeting if Red Robin doesn't fly into action.
Vintage said it has sought communication with management to help drive an improvement in the strategic direction and to help recruit "an 'A+' operator" to accept the CEO role, given that "it is clear that many such quality candidates are refusing to entertain the opportunity due to the lack of confidence in the board's leadership and Red Robin's disastrous operating and market performance."
Greenwood Village, Colorado-based Red Robin played some defense against a hostile takeover by recently adopting a shareholder rights plan.
Founded in 1969, there are more than 570 Red Robin restaurants and franchises across North America
Contact Uttara Choudhury at [email protected]