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Report of Del Frisco’s bids sends shares soaring

Darden, Ruth’s and Landry’s submit interest, sources tell The Deal

Reports of at least three large restaurant companies submitting bids for Del Frisco’s Restaurant Group Inc. sent the multi-brand operator’s shares soaring on Monday.

Irving, Texas-based Del Frisco’s stock closed up 31% Monday, at $6.23 a share, from Friday’s close of $4.75 a share.

Del Frisco’s has been considering strategic alternatives since December, when the parent to Del Frisco’s Double Eagle Steakhouse, Del Frisco’s Grille, Bartaco and Barcelona Wine Bar said it would entertain offers to sell all or part of its portfolio.

TheDeal.com website on on Monday cited sources who said Orlando, Fla.-based Darden Restaurants Inc., which wants to buy the entire business, and Winter Park, Fla.-based Ruth's Hospitality Group Inc. and Houston-based Landry's were interested in the steakhouses.

Del Frisco’s said last week that it was planning to lay off about 15% of its corporate staff in a move to trim $3 million in 2019 and $5 million.

Norman Abdallah, Del Frisco’s CEO, said in a statement: “We have identified additional synergy opportunities to enhance our efficiencies and streamline our teams now that we have moved past our recent development ‘peak’ of 15 restaurant openings in the space of 10 months.”

He added that Del Frisco’s had completed six of its planned eight restaurant openings for 2019.

“A reduction in force is a difficult but necessary step and we are committed to treating impacted employees with respect and support through this period of change,” Abdallah said.

The staff cuts will “impact all levels of the organization in Del Frisco’s restaurant support center, the field across three of the four brands and our contract support,” the company said.

For the first quarter ended March 26, Del Frisco’s swung to a loss of $18.3 million, or 55 cents a share, from a profit of $400,000, or 2 cents a share, in the same period last year. Revenues grew to $120.4 million from $73.3 million in the prior-year period.

Del Frisco’s systemwide same-store sales were up 1.3% in the quarter, with the Double Eagle slipping 0.4% but increases of 0.2% at Del Frisco’s Grille, 3.7% at Barcelona and 6.7% at Bartaco.

Del Frisco's Restaurant Group has 78 restaurants across 17 states and Washington, D.C.

Contact Ron Ruggless at [email protected]

Follow him on Twitter: @RonRuggless

Correction: May 22, 2019
This story has been edited to correct Ruth's Hospitality's headquarters city.
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