Content area
Full Text
DALLAS - Restaurant-andarcade operator Dave & Buster's Inc.,bruised by a 92-percent thirdquarter earnings drop and flagging unit sales through its third quarter, will have some super-rich investors from Britain looking closely over its shoulder to make sure they are able "to maximize the value of their investment" in the company
Specific details on what the investors intend to do in their new position of power in the company remained sketchy, but some observers are speculating that the activity may spark a managementled leveraged buyout in a fight for control.
Leading the purchase move is Joseph Lewis, reportedly one of the richest people in the United Kingdom, who expanded a small fortune built on restaurants into a currency-trading operation that made him a billionaire.
He and his wife, Jane Lewis, through their Bahamian-based Mandarin Inc., have assembled some 10.6 percent of D&B, much of it at depressed prices ranging from $5.72 to $6.19 a share following the sharp drop in the company's stock just after the company revealed Dec. 10 that its third-quarter earnings would fall far short of estimates.
"The people at Dave & Buster's have to be considering their own options right now, and I would think that means they have to be looking at a management-led buyout as one of those options," said Bill Baldwin, a principal in the Baldwin Anthony McIntyre & Boles investment firm in Dallas.
"The book value of the company is about $10.50 a share, and the stock is now trading way below replacement value," he noted, conjecturing that "the new investor might try to do a tender for the whole company."
He pointed out that the company and the concept have good value because "two-thirds of this company has been built in the last few years.
"I think they just took their eye off the ball and didn't watch what was happening to the repeat business," he said. "The repeat business has fallen off, and they're working on getting it back. They have damn good locations and a great concept.
"Is it a winner? Sure it is. It has too much of a good track record to bet against it."
Company officials were not commenting on just what direction they would take in reaction to the large Lewis...