SPARTANBURG S.C. Denny's Corp. fired back Wednesday against a dissident group of shareholders that has publicly criticized the company and is seeking to unseat three of its board members, including chief executive Nelson Marchioli.
The group, called the Committee to Enhance Denny's, has recently sent letters to the company's shareholders in which it accuses the family-dining company and its executives of wasteful spending, poor management and ineffective marketing tactics.
In its own letter to shareholders, Denny's slammed the group, saying it is "just plain wrong on the facts" and out to serve its own agenda.
"We can only infer from their actions and their prior history that this group is not interested in fully understanding or improving the fundamental foundation on which long-term value for all our stockholders rest,” Denny's said in its letter, “but rather is focused on its own personal agenda and short-term self-interest.”
“Not surprisingly, this group has chosen to play fast and loose with the truth," Denny’s continued.
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Denny's letter to shareholders
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The Committee to Enhance Denny’s letter to shareholders
In refuting the group's claims, Denny's pointed to recent moves aimed at improving the company's performance, including the rollout of a value menu and a deal struck with Pilot Travel Centers to open more of the family-dining chain's locations in travel centers.
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The shareholder group has nominated three of its members to replace Marchioli, Debra Smithart-Oglesby and Robert Marks on Denny's board. The group's nominees are Patrick H. Arbor of Macquarie Futures USA Inc., Jonathan Dash of Dash Acquisitions, and David Makula of Oak Street Capital Management. The group collectively owns 6.5 percent of Denny's common stock and is led by Dash Acquisitions and Oak Street.
Shareholders are expected to vote on the board’s directors at their annual meeting May 19.
In its letter Wednesday, Denny's urged shareholders not to vote for the group's candidates and approve the board's own slate of eight nominees.
"We believe the consistent misstatements made by the dissident group demonstrate their clear lack of knowledge about both Denny’s and the restaurant industry as well as their willingness to say whatever is necessary to serve their own narrow self-interest," Denny's said.
Denny's, which operates or franchises more than 1,500 locations, has struggled with falling sales and traffic amid the economic downturn. In its most recent fourth quarter, the company reported same-store sale that dropped 6.1 percent at corporate restaurants and 7.2 percent at franchised units.
Contact Elissa Elan at [email protected].
