Jack in the Box shares pop amid activist investor buying

Jack in the Box shares pop amid activist investor buying

Jana Partners and Starboard increase positions in quick-service brand

Shares of Jack in the Box Inc. rose more than 4 percent Tuesday amid increase holdings by at least two activist investment firms.

New York-based Jana Partners LL. and Starboard Value LP increased holdings in the San Diego, Calif.-based Jack in the Box, parent to the burger chain as well as Qdoba Mexican Eats, according to Securities and Exchange Commission 13-F filings.

At market close Tuesday, Jack in the Box stock was up 4.3 percent, or about $4.30 a share, over Monday’s close of $99.7 a share.

In May, Jack in the Box said that it has hired Morgan Stanley & Co. LLC to advise it on potentially selling Qdoba Mexican Eats amid concerns that operating two different brands is hurting the company’s value.

On Monday, Jana said it had bought 1.3 million Jack in the Box shares, taking its holdings’ values to $134 million. Earlier this year, Jana had taken a big stake in Whole Foods. Jana sold that 8.2 percent stake in July for $300 million after Whole Foods agreed to be acquired by Amazon.com.

Also Monday, Starboard Value reported it had acquired 175,000 Jack in the Box shares in the quarter.

Starboard in 2016 trimmed its holdings in Orlando, Fla.-based Darden Restaurants Inc., after leading a a proxy fight that ousted Darden’s 12-member board in October 2014 and made the hedge fund’s CEO, Jeffrey C. Smith, chairman.

For the third quarter ended July 9, Jack in the Box reported profit grew 20.4 percent to $36.4 million, or $1.22 a share, from $30.2 million, or 91 cents a share, in the prior-year period. Revenues declined 3 percent to $357.8 million from $368.9 million in the same quarter last year.

Same-store sales were down 0.2 percent at Jack in the Box in the quarter and up 0.5 percent at Qdoba.

Jack in the Box is scheduled to release fourth-quarter earnings on Nov. 30.

As of July 9, Jack in the Box had more than 2,200 restaurants in 21 states and Guam. Qdoba had more than 700 restaurants in 47 states, the District of Columbia and Canada.

Contact Ron Ruggless at [email protected]

Follow him on Twitter: @RonRuggless

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