BOSTON (Reuters) – Activist hedge fund Jana Partners on Friday disclosed a large new stake in Outback Steakhouse owner Bloomin’ Brands Inc , returning for the second time in nearly two years to push for fresh changes after reaching a settlement in 2018.
FILE PHOTO: Barry Rosenstein, founder and managing Partner of JANA Partners LLC., speaks during the Sohn Investment Conference in New York May 4, 2015. REUTERS/Brendan McDermid
Jana, one of the industry’s most powerful activist hedge funds, said in a regulatory filing that it owns 9%, or 7.8 million shares, and plans to discuss strategic alternatives with management. These might include a sale of the company, spinning off pieces of the company, changing the way it spends money and who sits on its board.
Jana Partners could not be reached for comment.
Bloomin’ Brands did not immediately respond to an email seeking comment.
Bloomin’ Brands stock price jumped 6.3% to trade at $17.82, erasing all of this year’s losses, after Jana made its filing. When Jana disclosed its first meaningful stake in the company, in November 2017, the stock price surged 12% to trade at $20.54.
The company and the activist hedge fund quickly reached a settlement in February 2018 and agreed to add an independent director to its eight member board. Wendy Beck, a former chief financial officer at Norwegian Cruise Line Holdings Ltd, still sits on the board.
Jana, which prefers to stay out of the limelight, quietly took profits on its position as management declared the company had turned a corner. By the end of the second quarter 2018, Jana no longer listed the stock as a position on its regulatory filing.
But an increase in stock sales by company insiders coupled with a sinking stock price prompted Jana to return a second time, something it generally does not do, a person familiar with the fund’s investments said.
Jana Partners, run by Barry Rosenstein, has scored big wins including pushing for changes at Whole Food Market that prompted the grocer to sell itself to Amazon.com.
Bloomin’ Brands faced two activists two years ago. Barington Capital called for a spinoff of three smaller restaurant chains — Bonefish Grill, Carrabba’s and Fleming’s — to be separated into a new company and for Outback to be run independently. It also asked for changes on the board and said costs were too high.
Earlier this year, as Jana Partners was building its Bloomin’ Brands stake anew, Barington cut its position by more than 75%, a filing shows.
Reporting by Svea Herbst-Bayliss; Editing by Tom Brown