Red Robin Gourmet Burgers, Inc. (NASDAQ: RRGB) has responded to a letter from private-equity firm Vintage Capital Management, LLC stating it “undervalues” the company.
In July, Vintage Capital said it's willing to pay $40 a share for Red Robin Gourmet Burgers Inc. and contacted the restaurant chain to launch a review of alternatives.
The Red Robin Gourmet Burgers board and management team have responded to the interested party with the following statement:
"As previously announced, the Red Robin Board carefully reviewed and considered Vintage's proposal, consistent with its fiduciary duties and in consultation with its legal and financial advisors. The Board unanimously determined that the proposal undervalues Red Robin and is not in the best interests of all shareholders, as the strategic plan currently being implemented by Red Robin positions the Company to deliver greater value to its shareholders than Vintage's proposal.”
The company has also announced that Paul Murphy will join Red Robin as CEO and as a member of the company's board of directors, effective Oct. 3. Murphy has been in the restaurant industry more than 30 years and has experience in operational, brand-positioning and turnaround.
Red Robin Gourmet Burgers shares closed Tuesday at $35.02. The stock has a 52-week high of $41.15 and a 52-week low of $24.57.
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