The Morning Brief: Marcato Criticizes Buffalo Wild Wings Board Decision

March 28, 2017   Stephen Taub


The activist investor says the wing purveyor’s proposed changes don’t go far enough.

Shares of Buffalo Wild Wings fell about 2 percent, to close at $145.25, after activist hedge fund firm Marcato Capital Management publicly opposed the casual dining company’s announcement it would add just one of the investor’s nominees to its board of directors. San Francisco-based Marcato, which owns 5.6 percent of the stock, said in a press release it is "deeply troubling" the company took the action without consulting Marcato or other major shareholders.

"In our view these changes do not go far enough and the company’s rejection of our proposal to adopt a universal proxy ballot is clearly designed to thwart shareholder democracy," Marcato added.

In early February Marcato nominated four people to the board, including Mick McGuire III, who heads up the hedge fund firm, and three others who have experience in the restaurant or food service businesses. They include Sam Rovit, the person Buffalo Wild Wings nominated on Monday. In January Buffalo Wild Wings announced a $400 million stock repurchase program, bringing the total authorization to $900 million. Marcato announced its activist position in the stock in late July. The shares are down more than 17 percent after peaking on December 9.

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Tiger Global Management participated in a $100 million investment in Delhivery, India’s largest e-commerce supply chain services company. In 2015 Tiger Global had led the company’s $85 million financing.

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Alec Litowitz’s Magnetar Capital has invested $10 million in FS Energy Total Return Fund, a closed-end interval fund launched by FS Investments, an alternative investment manager. The fund plans to invest in equity and debt securities of public and private energy and energy infrastructure companies. FS Investments manages more than $5 billion of energy and power assets, with a focus on directly originated private debt investments.

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D.E. Shaw raised its stake in Liberty Interactive to a little over 4 million shares as of March 15, giving it a stake of 5 percent in the broadband giant. The investment is passive.


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