(Reuters) - Del Frisco’s Restaurant Group Inc said on Monday it would add a board seat as part of a deal with activist shareholder Engaged Capital, which was pushing for a sale of the restaurant operator.
The company agreed to appoint Joe Reece to its board and also as chairman of the transaction committee that is overseeing Del Frisco’s plan to review strategic options. Reece’s appointment will increase the board size to seven members.
Shares of the company, which owns Eagle Steak House and Frisco’s Grille chains, rose nearly 4 percent to $8.25 in morning trade.
Engaged Capital, the company’s third-largest shareholder with a near 10 percent stake, has been urging for the sale saying Del Frisco’s was poorly managing its steakhouse restaurants and had rushed into buying two chains to avoid an acquisition.
In response, the company had adopted a shareholder rights plan, or a ‘poison pill’, with a 10 percent trigger in December, but said on Monday it was ending the agreement well before its scheduled expiration due to the deal with Engaged.
Reece, who also sits on the board of ecommerce company RumbleON Inc, will remain a board director until 2021, Del Frisco’s said.
Engaged Capital will now vote in favor of Del Frisco’s nominees and other proposals at any shareholder meeting, subject to certain exceptions, the company said.
Reporting by Aishwarya Venugopal in Bengaluru; Editing by Maju Samuel