Shares of burger joint Red Robin (RRGB - Get Report) were soaring Thursday after the company said in a Securities and Exchange Commission filing that institutional shareholder Vintage Capital wants to purchase the company outright.
Vintage Capital, which holds 1.5 million shares, sent a letter to the company's board offering a bid of $40 a share to acquire 100% of the company in an all-cash transaction.
The purchase price represents an upside of 57% from the stock's closing price Wednesday of $25.46. The stock was trading up 24.39% to $31.67 on Thursday.
"Our sincere hope, as explained to members of the Board on a number of occasions, was to work collaboratively to recruit an "A+" operator to accept the CEO role and lead Red Robin back to greatness. It is clear that many such quality candidates are refusing to entertain the opportunity due to a lack of confidence in the Board's leadership and Red Robin's disastrous operating and market performance," Vintage Capital said in its letter that was attached to the SEC filing.
Red Robin has been searching for a CEO since Denny Marie Post retired in April amid a 52% decline in the company's stock price over the past 12 months before Thursday's sudden spike.
"Settling for anything less than an outstanding operator is not acceptable, and with an increasing risk of that being the result of the search process and the continued deterioration of the business under the present Board and management, we feel strongly that the Company should immediately commence a comprehensive review of strategic alternatives, including an auction of the Company," Vintage Capital said.