Glass Lewis Recognizes the Strength of Buffalo Wild Wings' Nominees
and Strategy for Value Creation
Buffalo Wild Wings Urges Shareholders to Protect the Value of Their
Investment and Vote "FOR" Buffalo Wild Wings' Director Nominees on the
YELLOW Proxy Card Today
Buffalo Wild Wings, Inc. (NASDAQ:BWLD) today announced that Glass Lewis
& Co. ("Glass Lewis"), a leading independent proxy firm, in its thorough
and balanced, has recommended that Buffalo Wild Wings shareholders vote "FOR"
all nine of Buffalo Wild Wings' highly qualified and experienced
director nominees, as stated in its report1: "We
believe shareholders would be best served by electing all nominees
comprising the reconstituted board as proposed by the Company."
The Buffalo Wild Wings' 2017 Annual Meeting of Shareholders ("Annual
Meeting") will be held on June 2, 2017. To vote in accordance with Glass
Lewis' recommendations, shareholders should vote the YELLOW card for ALL
nine company nominees.
Glass Lewis failed to recommend any nominees proposed by Marcato Capital
Management, L.P. ("Marcato" or the "Dissident"). In its 39-page analysis
of Buffalo Wild Wings, Glass Lewis concluded:
"[W]e believe the Dissident has failed to make
a compelling case for the additional changes it seeks on the board,
which would have the effect of removing most of the board's remaining
independent institutional knowledge. Further, we believe the Dissident's
nominees other than the one also nominated by the Company either have
experience that would not be additive to the refreshed board or
potential conflicts which weakens their candidacies, especially when
compared to the valuable perspectives the incumbent directors are in
position to contribute to the board going forward as the Company seeks
to enhance its overall performance and returns. Based on these factors, we
believe shareholders would be best served by electing the Company's
entire slate of director nominees."
In supporting all nine Buffalo Wild Wings nominees to the Board of
Directors at the 2017 Annual Meeting, Glass Lewis also stated in its
"After engaging with Marcato and considering its various critiques of
BWW's strategies and performance, the board and management reviewed
various alternatives and their likely outcomes and have now crafted
and communicated a more comprehensive strategy that incorporates some
of the Dissident's suggestions. In our view, the
Company's plan appears reasonable, strikes a prudent balance between
risk and reward and, upon a full and successful implementation under
the oversight of a refreshed board, would likely result in enhanced
"[T]he election of the Dissident's nominees
is either unwarranted or unnecessary at this point.
Notably, the Dissident has proposed replacing all three independent
directors who have served on the board for longer than one year, which
could leave the board lacking critical institutional knowledge needed
for the Company's ongoing success. In addition, we
believe the board has raised valid concerns with respect to the
interests, perspectives and experiences of the Dissident's nominees,
which make their candidacies for the BWW board inappropriate,
duplicative or inferior to the Company's nominees.
Therefore, we believe shareholders would be best served by electing
all nominees comprising the reconstituted board as proposed by the
"[W]e believe shareholders may be encouraged by the significant action
recently taken by the board and management team over the past 18
months -- related to strategy, operations and leadership. In our view,
these actions suggest a newfound focus and
commitment on the part of the board and management to address the
underlying business and financial challenges confronting BWW and to
re-establish the Company as a top performer in the industry."
"[T]he Company has adequately responded to the Dissident's concerns,
either by taking appropriate action or offering reasonable
explanations as to why certain of Marcato's proposals are unwarranted
or ill-advised at this time."
"The Company has also developed and clearly communicated what appears
to be a reasonable strategic operating plan aimed at increasing
restaurant-level profitability through sales initiatives and
cost-saving measures, while also pursuing financial strategies such as
a realigned capital structure and restaurant portfolio optimization in
a manner which we believe to be more prudent
and rational than the plan proposed by the Dissident."
Commenting on the only specific proposal that Marcato has made to
increase returns for shareholders, Glass Lewis noted the inherent risk
associated with Marcato's "aggressive, unprecedented plan" as well as
its agreement with the company's more carefully evaluated approach:
"[T]he board has convincingly argued, based on its own analysis and
that of its financial advisors, not to mention comments from one of
Marcato's own nominees [Lee Sanders], that Marcato's
assumptions underlying its refranchising proposal are flawed, unproven
or speculative, establishing a reasonable basis for the board's
rejection of this plan."
"[T]he BWW board has presented several considerations for shareholders
which, in our view, have the effect of resoundingly rejecting the
proposal as an aggressive, unprecedented and
unfounded strategy that is not right for BWW to the extent
sought by the Dissident."
"Mr. Sanders stated that "too much available product in the market
will cause a commensurate decline in value and demand over a 2-3 year
period." Mr. Sanders' expectation seems reasonable to us. Despite
Marcato's opinion that robust demand and financing among the
franchisee community would support a multi-year sale process of
hundreds of units, we remain particularly skeptical of this portion of
the Dissident's plan."
"The Company notes that Marcato was very supportive of the
refranchising at Applebee's of approximately 480 stores, representing
effective 99% of its units. … However, the Company notes that
Applebee's same-store sales growth has struggled following the
transition and DineEquity's stock has underperformed. The Company
further notes that, after Marcato supported the refranchising at
Applebee's, Marcato held DineEquity stock for only a short time before
selling its entire position. … [T]he Applebee's example certainly
doesn't set a good precedent for Marcato's proposal of a 90%
franchised model at BWW."
"The board notes that, in the absence of data about the market for the
Company's restaurants, and given the limited and unsuccessful for such
a major undertaking, it would be imprudent to embark on such a
dramatic transformation at this time. We
fully agree with the board's assessment in this regard,
with the board willing to alter the franchise mix in a more timely and
prudent manner as necessary, but unwilling to pursue such an
aggressive endeavor with what appears to be a significant risk of
destroying shareholder value.
Glass Lewis also raised concerns about the Marcato nominees for the
Board and their abilities to add value to the Buffalo Wild Wings Board:
"[W]e…believe the Company's director nominees
are better suited and qualified than the Dissident's director nominees
to guide BWW toward a superior outcome, whether it is with current or
potentially new management."
"Overall, with five of the Company's eight independent director
nominees having been appointed or nominated to the board in the last
seven months, we believe it's difficult to make a case that the BWW
board is seeking to protect the status quo or that additional board
refreshment is required or advised at this point."
"[W]e don't believe [Marcato's] proposal of replacing all three of the
remaining independent directors who have served on the board for more
than one year with the Dissident's … nominees, is either warranted or
advisable. Such an outcome would eliminate
virtually all remaining independent institutional knowledge of the
Company, which experience may continue to be critical for BWW's future
"W]e believe the Dissident's nominees other than [Mr. Rovit] either
have experience that would not be additive to the refreshed board or
potential conflicts which weakens their candidacies, especially when
compared to the valuable perspective the
incumbent directors are in position to contribute to the board going
forward as the Company seeks to enhance its overall
performance and returns."
"[W]e don't believe Mr. McGuire's other experience outside of his
status as an engaged BWW shareholder would be particularly beneficial
on the BWW board."
"[D]espite his restaurant experience, we're not inclined to favor [Mr.
Bergren's] candidacy at the cost of losing institutional knowledge on
"[W]e simply have too many concerns with respect to Mr.
Sanders' potential conflicts that, in our minds, render him less
suitable for the BWW board than any of the incumbent
directors that the Dissident has opposed."
Glass Lewis also called into question Marcato's focus on discrediting
Buffalo Wild Wings' peer group and record of outperformance, stating:
"[T]he Company's total shareholder returns over the unaffected three-,
five- and 10-year periods outperformed the
median returns of all three peer groups, as well as the
performance of the broader market index."
"[W]e find BWW's total returns, particularly on a relative basis
during the unaffected three- and five-year periods, to be impressive
and likely more than satisfactory for shareholders."
"Marcato's consistent criticisms of the Company's casual dining peer
group for TSR measurement purposes appear to be invalid
and disingenuous… As BWW notes, Marcato's insistence on
focusing on the Company's proxy peer group or much broader market
indices, refusing to acknowledge the validity of what appears to be a
more appropriate casual dining peer group, and not proposing a
potentially more comparable alternative set of peer companies,
suggests that the results of such appropriate
comparative analyses contradict Marcato's summative claims regarding
the extent of BWW's underperformance."
"BWW's relative returns were strongest when measured against the
closest and most appropriate peer group, in our view, being the casual
dining peers. Even when measured against the
proxy peers supposedly preferred by Marcato, we see that BWW
significantly outperformed the median returns of that group over the
unaffected three- and five-year periods considered to be more relevant
by the Dissident."
Commenting on the Glass Lewis report, Buffalo Wild Wings issued the
We are pleased that Glass Lewis has recommended that shareholders vote
for all nine of Buffalo Wild Wings' highly qualified and experienced
director nominees, reaffirming our confidence that our directors and
nominees have the right combination of fresh perspective and experience
in the restaurant food service, entertainment, technology, retail and
By supporting Buffalo Wild Wings' nominees, Glass Lewis has recognized
the company's record of outstanding performance compared to casual
dining peers. Under the oversight of our best-in-class, refreshed Board,
reflecting a wide diversity, Buffalo Wild Wings is successfully
executing on a clear, unique strategy driven by innovation,
differentiation and financial discipline. The company is taking
proactive steps in response to the current operating environment,
undertaking a number of initiatives to drive sales, reduce costs and
optimize its portfolio. We are confident that we will continue to
deliver sustainable and significant value for shareholders.
We strongly urge shareholders to follow Glass Lewis' recommendation and
protect the value of their investment by voting "FOR" all nine of
Buffalo Wild Wings' director nominees - Cynthia L. Davis, Andre J.
Fernandez, Janice L. Fields, Harry A. Lawton, J. Oliver Maggard, Jerry
R. Rose, Sam B. Rovit, Harmit J. Singh and Sally J. Smith - on the YELLOW
Lazard Ltd is serving as financial advisor and Faegre Baker Daniels is
serving as legal advisor to the company.
If you have any questions or require any assistance with voting your
please contact the company's proxy solicitor listed below:
105 Madison Avenue
New York, New York 10016
Collect: (212) 929-5500
About the Company
Buffalo Wild Wings, Inc., founded in 1982 and headquartered in
Minneapolis, is a growing owner, operator and franchisor of Buffalo Wild
Wings(R) restaurants featuring a variety of boldly-flavored,
made-to-order menu items including its namesake Buffalo, New York-style
chicken wings. The Buffalo Wild Wings menu specializes in 21
mouth-watering signature sauces and seasonings with flavor sensations
ranging from Sweet BBQ(TM) to Blazin'(R). Guests enjoy a welcoming
neighborhood atmosphere that includes an extensive multi-media system
for watching their favorite sporting events. Buffalo Wild Wings is the
recipient of hundreds of "Best Wings" and "Best Sports Bar" awards from
across the country. There are currently more than 1,220 Buffalo Wild
Wings locations around the world.
To stay up-to-date on all the latest events and offers for sports fans
and wing lovers, like Buffalo Wild Wings on Facebook, follow @BWWings
on Twitter and visit www.BuffaloWildWings.com.
Cautionary Statement Regarding Certain Information
This communication contains "forward-looking statements" within the
meaning of the federal securities laws. Such statements include
statements concerning anticipated future events and expectations that
are not historical facts. All statements other than statements of
historical fact are statement that could be deemed forward-looking
statements. Actual results may vary materially from those expressed or
implied by forward-looking statements based on a number of factors,
including the factors described under "Risk Factors" in Part I, Item 1A
of our Annual Report on Form 10-K for the fiscal year ended December 25,
2016, as updated or supplemented by subsequent reports we file with the
SEC. We do not assume any obligation to publicly update any
forward-looking statement after they are made, whether as a result of
new information, future events or otherwise.
Buffalo Wild Wings, Inc., its directors and certain of its executive
officers and employees are participants in the solicitation of proxies
from Buffalo Wild Wings shareholders in connection with its 2017 annual
meeting of shareholders to be held on June 2, 2017. Information
concerning the identity and interests of these persons is available in
the definitive proxy statement Buffalo Wild Wings filed with the SEC on
April 21, 2017.
Buffalo Wild Wings has filed a definitive proxy statement in connection
with its 2017 annual meeting. The definitive proxy statement, any
amendments thereto and any other relevant documents, and other materials
filed with the SEC concerning Buffalo Wild Wings are (or will be, when
filed) available free of charge at http://www.sec.gov
Shareholders should read carefully the definitive proxy statement and
any other relevant documents that Buffalo Wild Wings files with the SEC
when they become available before making any voting decision because
they contain important information.
1 Permission to use quotations neither sought nor obtained.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170526005390/en/
Buffalo Wild Wings, Inc.
Additional Investor Contact
Bob Marese/Paul Schulman, 212-929-5500
Frank, Wilkinson Brimmer Katcher
Meaghan Repko / Nick Lamplough,
Source: Buffalo Wild Wings, Inc.
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