MINNEAPOLIS _ Buffalo Wild Wings Inc. on Monday fired back at the activist investor trying to take control of the company, saying he has "no credible plan" to run it in urging shareholders to stay with current leaders.
The company set a June 2 date for its annual shareholders meeting, a usually perfunctory event that this year could mark a turning point in it the company's 35-year history.
In a proxy filing and letter sent to shareholders, Buffalo Wild Wings refuted accusations by Marcato Capital Management and its principal Mick McGuire that Wild Wings executives and directors had taken their foot off the gas after creating one of the fastest-growing and most profitable restaurant chains in the U.S.
The company, based outside the Twin Cities, said that several key financial measures _ shareholder returns, earnings per share growth, returns on capital, same-store sales, restaurant margins _ outperformed its casual dining rivals.
"And we are not sitting still," the company said.
The company asked shareholders to support its slate of nine directors, including Sally Smith, who has led Buffalo Wild Wings as chief executive since 1996.
Buffalo Wild Wings shares, which popped to their highest level of the year last week, rose 0.25 percent in trading Monday.
Through Marcato, McGuire took a 6 percent stake in Buffalo Wild Wings last summer, becoming its largest shareholder after a handful of major institutional investment firms. He mildly criticized the company after initially taking the stake but gradually became more demanding. He urged Buffalo Wild Wings to sell a large number of its company-owned restaurants, proposed his own slate of board nominees, including himself, and last week went to a new extreme by calling for Smith's resignation.
In statements and interviews, McGuire has said the company refused to engage with him. Buffalo Wild Wings, in its Monday filing, said its executives and directors "have invested significant effort in engaging with Marcato."
The company said that some of McGuire's ideas have merit and are being implemented. It noted that it had begun to sell some of its company-owned restaurants. But it added that his desire to sell nearly all of them "simply does not pencil out."
"Given our focus on extending our successful long-term track record, we will not support risky financial engineering strategies that provide and unlikely and modest short-term benefit but create substantial long-term risk," the company said in the letter to shareholders. "We do not believe that is what you want us to do, nor would you be well-served by it."
