Coverage: Roark Capital offers to buy Buffalo Wild Wings

Atlanta-based Roark Capital has made an offer to buy casual dining restaurant operator Buffalo Wild Wings for more than $150 per share.

Lauren Hirsch and Angelica LaVito of CNBC.com had the news:

The person who spoke to CNBC asked not to be named because the information is confidential. Buffalo Wild Wings and Roark did not immediately respond to requests for comment

A private equity buyout of the the chicken wing restaurant chain would come months after it lost a bitter proxy contest that led to the retirement announcement of its CEO and the addition of three new directors to its board.

Activist investor Marcato had pushed Buffalo Wild Wings to move away from its strategy of mostly owning its restaurants to a more capital-light franchised model. After the proxy fight concluded in June, CEO Sally Smith said she would retire by the end of the year. Marcato added three of its four nominees to the board, including Marcato manager Mick McGuire.

Buffalo Wild Wing’s stock had dropped 34 percent over the last year from $163 a share to $108 a share, before surprising the street last month when it beat its third quarter earnings expectations. As of Monday’s close, the stock was down more than 28 percent over the past 12 months.

Ed Hammond and Craig Giammona of Bloomberg News reported that Roark has been in previous restaurant deals:

Roark Capital, a private equity firm, is a prominent player in the restaurant industry, with investments in chains such as Arby’s, Cinnabon, Carvel and Auntie Anne’s.

Arby’s previously made a bid for Popeyes Louisiana Kitchen Inc., with backing from Roark, people familiar with the matter said earlier this year. The suitors were ultimately trumped by Restaurant Brands International Inc., which bought the fried-chicken chain for about $1.8 billion.

In going after Buffalo Wild Wings, the investment firm is eyeing a company on the rebound.

Last month, the company boosted its earnings forecast — helped by an effort to cut costs. The company also is selling more boneless chicken wings, rather than the traditional variety. That’s helped Buffalo Wild Wings sidestep a surge in wing prices.

Evan Ramstad of the Minneapolis Star Tribune reported that the offer is below what another investor promised:

But the offer is below the price of Buffalo Wild Wings shares before the activist investor, Mick McGuire of San Francisco-based Marcato Capital, won a proxy battle at the company’s annual meeting in early June. And it is well below the $300 price McGuire told investors he could lead the company to over the next few years.

The offer was sent to Buffalo Wild Wings in recent weeks, the Journal said. Neither firm has disclosed it publicly, but the Journal said both have hired investment bankers to advise them on a transaction.

Representatives of Buffalo Wild Wings did not respond to requests for comment on the report and there was no immediate word from McGuire. A spokeswoman for Roark declined to comment.

Buffalo Wild Wings shares last traded above $150 on May 26, about a week before the annual meeting. When McGuire won the proxy fight and seats on the company’s board, Buffalo Wild Wings Chief Executive Sally Smith announced she would retire from the company by the end of the year.