Applebee's shareholder Breeden Capital refuses company's offer of two board seats

By Lisa Kerner

Charlotte, N.C., March 9 - Applebee's International, Inc. said Breeden Capital Management LLC rejected its offer of two seats on Applebee's board of directors, according to a company news release.

Breeden Capital, a 5% shareholder, is seeking four board seats. The Greenwich, Conn., activist hedge fund also rejected the company's previous offer on March 2 to immediately place Breeden Capital founding partner Steven J. Quamme on Applebee's board, its strategy committee and its governance committee. In exchange, Breeden Capital would have been required to withdraw its other nominees.

Breeden Capital's chairman and chief executive officer Richard C. Breeden rejected Applebee's March 8 offer to place one of two additional nominees on a second board seat, expanding the board to 14, from 12, seats.

"The company's first choice was to negotiate a settlement to avoid a contentious, costly and time-consuming proxy fight," co-chairman of Applebee's board Jack Helms said in the release.

"Every shareholder understands that would be in the best interests of the company. While we are moving forward with our strategic review process and business plan, we continue to hope that Mr. Breeden will work with us, and not against us, in improving shareholder value."

In response to Applebee's comments on the matter, Richard Breeden said "We believe that the best way to improve Applebee's declining performance and to reform unhealthy governance practices is for shareholder interests to have a strong voice in Applebee's boardroom.

"Our discussions with Applebee's failed to persuade us that their proposals were sufficient to effect the meaningful changes that we believe are required to increase long-term shareholder value. In the coming election, shareholders will have a choice to vote for the four incumbents representing the status quo, or for our four nominees seeking positive change."

Breeden Capital said it has urged Applebee's board to study a potential recapitalization or restructuring since October.

Applebee's is an Overland Park, Kan., restaurant company.

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