Risk & Compliance

Applebee’s Urges Limited Director ‘Menu’

Even as it makes changes seemingly aimed at appeasing Wall Street, the restaurant company asks shareholders not to vote for a dissident slate propo...
Stephen TaubMarch 22, 2007

Applebee’s International has taken the offensive in its proxy fight with Breeden Capital, the activist hedge fund headed by former Securities and Exchange Commission chairman Richard Breeden.

Even as it makes changes seemingly aimed at appeasing Wall Street, Applebee’s asked shareholders not to vote for the dissident slate of four director nominees.

“Your board of directors believes this is not in your best interest,” the restaurant company wrote in a letter accompanying its proxy. “Your board urges you not to sign or return any proxy card that you may receive from Breeden Partners L.P.”

Applebee’s subsequently announced that it will close 24 of its 528 company-owned restaurants. The company conceded that in the past, it has closed an average of one or two company-owned restaurants per year.

“The decision to close underperforming restaurants reflects the company’s and our board’s commitment to disciplined capital allocation and to ensuring we are maximizing both our physical assets and invaluable people resources,” said president and chief executive officer Dave Goebel, in a statement.

Applebee’s stressed that this action is one of several recent decisions “designed to optimize its asset base.”

In February, the company sold one of its two corporate aircraft, and it is selling its Overland Park, Kansas, headquarters building. Applebee’s also plans a sale-leaseback of its new headquarters building in Lenexa, Kansas, after moving in later this year.