Marcato Asks the Wrong Questions and Provides the Wrong Answers
Buffalo Wild Wings, Inc. (NASDAQ:BWLD), in response to a press release
issued by Marcato Capital Management, L.P. ("Marcato") on May 22, 2017,
today issued a presentation identifying Marcato's continued inaccurate
and misleading statements. The presentation is available at http://www.buffalowildwings.com/en/2017-annual-meeting/
and will be filed with the Securities and Exchange Commission ("SEC").
This Smart News Release features multimedia. View the full release here:
A selection from the presentation is included in the accompanying slides:
Before voting at the company's 2017 Annual Meeting of Shareholders to be
held on June 2, Buffalo Wild Wings believes shareholders have the right
to obtain truthful answers from Marcato to the following questions:
1. If Marcato is right about a massive refranchising plan, why has it
not even attempted to justify its assumptions and methodology?
Buffalo Wild Wings has identified and publicly disclosed several
important analytical errors or aggressive assumptions in the cornerstone
of Marcato's plan for Buffalo Wild Wings. Marcato has now put out a
response to Buffalo Wild Wings' 93-page presentation, but has not
responded to the company's detailed critique of Marcato's refranchising
related assumptions and modeling.
2. Other than the unprecedented refranchising plan, what concrete
operating suggestions do the Marcato nominees have for improving the
business? Marcato claims its slate of nominees are experts in casual
dining and, even, in Buffalo Wild Wings' business. Yet, Marcato has
offered no operational suggestions for how to improve the business.
3. How did the company perform so well for shareholders, and
outperform its peers, with a Board that Marcato believes is inadequate?
Buffalo Wild Wings has generated returns for shareholders of 24% per
year, compounded, since its 2003 IPO. Yet, Marcato claims that the
incumbent directors, who sat on the Board of Directors for some or all
of this time, lack any relevant skills.
4. Why did Marcato purchase puts on nearly its entire
investment in Buffalo Wild Wings - thereby eliminating its downside -
the same day that Buffalo Wild Wings first publicly disclosed the
significant analytical errors in Marcato's refranchising proposal?
Buffalo Wild Wings had previously discussed these errors with Marcato
and Marcato has still not corrected them or justified its erroneous
5. Given Mr. McGuire's weak performance in the boardroom, why should
shareholders believe Mr. McGuire can create value for them at Buffalo
Wild Wings? During Mick McGuire's one-year term on the Board of NCR,
no value was created for shareholders. Then, Mr. McGuire sold his stock.
During Mr. McGuire's directorship at Borders Group - including when he
was Chairman of the Board - the stock declined precipitously, and the
company eventually filed for bankruptcy.
6. Has Mr. Sanders continued his pattern of misrepresenting his
career and prior actions? Emil Lee Sanders claims in his biography
to have achieved successes while working at Buffalo Wild Wings that are
objectively and demonstrably false. Marcato has not corrected the
errors. Mr. Sanders also sent emails and texts in which he represented
that he was a principal interested in buying Buffalo Wild Wings
restaurant units from franchisees as recently as February 2017, after he
was nominated to the Board of the company by Marcato. In its recent
FAQs, Marcato claims Mr. Sanders was not trying to buy units himself,
but was merely working as a consultant for others and that his efforts
ceased in 2015. The letters and texts indicate otherwise.
7. What about Mr. Bergren's career performance should give Buffalo
Wild Wings shareholders comfort that he will add value to the Buffalo
Wild Wings Board? Marcato's nominee Scott Bergren was CEO of Pizza
Hut US when it materially underperformed its competitors. Mr. Bergren's
boss, the CEO of Yum! Brands, specifically called out Pizza Hut's
underperformance on public conference calls. Subsequently, Mr. Bergren
served as CEO of Pizza Hut Global for just one year before retiring.
Yum! Brands then announced a major restructuring and turnaround of the
Buffalo Wild Wings recommends that shareholders vote the YELLOW
proxy card "FOR" the election of all nine of the Board's
experienced and highly qualified 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.
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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170523006319/en/
Buffalo Wild Wings, Inc.
Additional Investor Contact
Bob Marese / Paul Schulman
Frank, Wilkinson Brimmer Katcher
Meaghan Repko / Nick Lamplough
Source: Buffalo Wild Wings, Inc.
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