Investors grab Steak n Shake stake, explore chain’s future

INDIANAPOLIS —An investor group that includes the parent of Lone Star Steakhouse & Saloon disclosed last month that it had amassed a 9.5-percent stake in family-dining company The Steak n Shake Co. with intentions to “maximize shareholder value” by “exploring an acquisition or other transaction.”

The group’s largest investor is Dallas-based hedge fund HBK Investments LP, with a 7.9-percent holding. The remaining interest is held by Dallas-based Lone Star Funds and by individual investor Robert J. Stetson. Lone Star Funds owned Captain D’s [3] and Shoney’s [4] until last year, and it purchased the multibrand Lone Star Steakhouse last December for about $585 million. —An investor group that includes the parent of Lone Star Steakhouse & Saloon disclosed last month that it had amassed a 9.5-percent stake in family-dining company The Steak n Shake Co. with intentions to “maximize shareholder value” by “exploring an acquisition or other transaction.”

The group’s 9.5-percent holding represents about 2.7 million shares and was purchased for $41.2 million, according to the group’s filing with securities regulators in late June. The filing also said the investor group did not intend to seek representation on Steak n Shake’s corporate board or engage in an acquisition or other transaction without first gaining board support. —An investor group that includes the parent of Lone Star Steakhouse & Saloon disclosed last month that it had amassed a 9.5-percent stake in family-dining company The Steak n Shake Co. with intentions to “maximize shareholder value” by “exploring an acquisition or other transaction.”

Steak n Shake [5] did not return calls seeking comment. —An investor group that includes the parent of Lone Star Steakhouse & Saloon disclosed last month that it had amassed a 9.5-percent stake in family-dining company The Steak n Shake Co. with intentions to “maximize shareholder value” by “exploring an acquisition or other transaction.”

The company’s market capitalization is about $420.5 million, based on the latest-quarter number of shares outstanding and its $14.78 per-share closing price on June 25, just prior to the investor group’s disclosure, which sent Steak n Shake’s stock up more than 16 percent on June 26. —An investor group that includes the parent of Lone Star Steakhouse & Saloon disclosed last month that it had amassed a 9.5-percent stake in family-dining company The Steak n Shake Co. with intentions to “maximize shareholder value” by “exploring an acquisition or other transaction.”

“We doubt the chain will be acquired by a competitor,” said securities analyst Bryan C. Elliott at Raymond James & Associates Inc. “We also would not expect a leveraged recapitalization. … This leaves two likely scenarios…a multiyear fundamental turnaround or radical strategy shift to a franchise business model.” —An investor group that includes the parent of Lone Star Steakhouse & Saloon disclosed last month that it had amassed a 9.5-percent stake in family-dining company The Steak n Shake Co. with intentions to “maximize shareholder value” by “exploring an acquisition or other transaction.”

Steak n Shake, which operates 439 restaurants and franchises 51 units to others, has struggled against seven consecutive quarters of soft same-store sales. For the April-ended first half of its fiscal 2007, Steak n Shake’s profit fell 23 percent from a year earlier to $10.5 million, or 36 cents per share. —An investor group that includes the parent of Lone Star Steakhouse & Saloon disclosed last month that it had amassed a 9.5-percent stake in family-dining company The Steak n Shake Co. with intentions to “maximize shareholder value” by “exploring an acquisition or other transaction.”