Activist investor nominates four people to Buffalo Wild Wings board

February 7, 2017 at 1:32AM

The activist investor who bought a sizable stake in Buffalo Wild Wings Inc. last year on Monday nominated four candidates to the company's board of directors, including himself.

Mick McGuire, principal at Marcato Capital Management, said in a statement that he made the nominations because a makeover of the board last fall didn't go far enough in addressing problems he sees at the Golden Valley-based chain of sports-themed restaurants.

Buffalo Wild Wings later Monday issued a statement that recounted meetings and phone conversations between its executives and McGuire. It said the governance committee of its board will review his nomination proposal and offer its formal recommendation with the proxy notice ahead of the company's annual meeting later this year.

"The board and management team are acutely focused on driving shareholder value," the company's statement said.

Since Marcato took a 5.2 percent stake in the company in July, McGuire has issued several statements calling for "new talent" and a change in the company's business model to rely more heavily on franchising. At present, about half of the nearly 1,200 Buffalo Wild Wings outlets worldwide are owned by the company and half are owned by franchisees. McGuire would like the firm to sell its own restaurants and get to a point where only 10 percent are company-owned and the rest by franchisees.

In a statement, he said Buffalo Wild Wings "has been unwilling to explore a serious dialogue in any of these areas."

In October, when the company last announced quarterly results, Chief Executive Sally Smith said Marcato's suggestions deserved "thoughtful consideration." That same month, Buffalo Wild Wings appointed three new independent directors and expanded its board from eight to nine members.

In its statement Monday, Buffalo Wild Wings noted that eight of its nine board members are independent and "collectively bring meaningful leadership experience across multiple disciplines, including finance, restaurant industry, franchising, global supply chain management, hospitality, merchandising, media, marketing and consumer insights."

McGuire said in his statement that the board lacked "relevant experience in the areas of restaurant operations, food service and supply chain innovation, franchise system management, corporate finance and capital markets."

In addition to himself, McGuire nominated Scott Bergren, former chief executive of Yum Brands' global Pizza Hut business; Sam Rovit, chief executive of CTI Foods; and Lee Sanders, managing partner of Rocket Chicks LP and a former executive at Buffalo Wild Wings. Shareholders will vote on the proposal at the company's annual meeting, usually held in May.

The company on Tuesday will report its results for the last three months of 2016. Analysts forecast a profit of $1.27 a share, slightly below its year-ago performance of $1.32 a share amid signs that plateauing interest in NFL football may have affected sales.

Evan Ramstad • 612-673-4241

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about the writer

Evan Ramstad

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Evan Ramstad is a Star Tribune business columnist.

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