GREENWOOD VILLAGE, COLO. – Shares of Red Robin Gourmet Burgers and Brews jumped 17% during extended trading on news the company received an unsolicited conditional proposal from Vintage Capital Management L.L.C. to acquire all outstanding common shares of the burger chain for $40 per share in cash. The proposed deal would amount to nearly $519 million.
“Red Robin’s board of directors and management team are committed to acting in the best interests of the company and all shareholders,” Red Robin said. “Consistent with its fiduciary duties and in consultation with its independent legal and financial advisers, the Red Robin board will carefully review and consider the proposal to determine the course of action it believes is in the best interests of the company’s shareholders.”
Red Robin posted disappointing results for the first quarter of 2019. Comparable restaurant revenue dropped 3.3% using constant currency rates, while comparable restaurant guest counts fell 5.5%. This was partially offset by a 2.2% increase in average guest check which was comprised of a 0.3% increase in menu mix and a 1.9% increase in pricing, the company said.
Total revenues declined 2.8% to $409.9 million from $421.5 million reported in the first quarter of 2018.
Net income for the quarter was $0.6 million in the first quarter compared with $4.4 million in the year-ago period. Adjusted net income was $2.4 million for the first quarter of 2019 compared to $9.1 million for the same period a year ago.