Bloomin’ Brands Inc. and activist investor Jana Partners LLC have agreed to add two board members to the parent of Outback Steakhouse, including the former president and CEO of International Dairy Queen, the company said Thursday.
The Tampa, Fla.-based casual-dining company said the two new independent directors will be added effective July 1, and will include the nomination of John Gainor Jr., formerly of Dairy Queen and a current board member at Jack in the Box Inc., and Scott Ostfeld of Jana Partners or a mutually acceptable candidate, bringing the board’s total to 10.
Jana Partners and its affiliates own about 9.2% of Bloomin’ shares, and the hedge fund has been exerting influence since 2017.
“We expect these director additions will enhance the board’s ongoing efforts to create shareholder value by growing the business and advancing key initiatives such as off premise and delivery, improving the cost structure, allocating capital to maximize returns and evaluating all options to maximize shareholder value,” said Jim Craigie, Bloomin’ Brands chairman, in a statement.
In November, Bloomin’ had announced it was looking at strategic alternatives, including a possible sale of all or part of the business. Executives later said it had received some interest in its Brazilian Outback business.
Barry Rosenstein, managing partner at New York-based Jana, said, “We are encouraged by the steps the company has been taking, including these director additions, and by the board’s ongoing commitment to exploring all avenues to create stockholder value.”
In connection with the settlement, Jana agreed to standstill and voting commitments.
For the fourth quarter ended Dec. 29, Bloomin’ Brands net income rose 157.8% to $28 million, or 32 cents a share, from $10.9 million, or 12 cents a share, in the same period last year, which included special charges. Revenues rose about 0.9% to $1.022 billion from $1.013 billion in the prior-year quarter.
Combined same-store sales for Bloomin’s U.S. restaurants increased 1.9% in the fourth quarter, with increases of 2.7% at Outback, 1.4% at Carrabba’s Italian Grill, 0.5% at Bonefish Grill and 0.9% at Fleming's Prime Steakhouse and Wine Bar.
Bloomin' Brands owns and operates more than 1,450 restaurants.
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