Richard McGuireâs Marcato Capital Management recently sent a letter to James Damian, chairman of the Board of Directors of Buffalo Wild Wings Inc (NASDAQ:BWLD) in which it asks for significant change to the composition of the companyâs Board and the management of the company, in order to achieve better value for shareholders. Marcato Capital Management, which owns 950,000 common shares of Buffalo Wild Wings (NASDAQ:BWLD) that amass 5.2% of the companyâs outstanding stock, started negotiations with the Board two months ago, and hasnât noticed a lot of progress since, which is why the fund decided to publicly share its analysis of the companyâs business, which it had already presented to management in June. Marcato hopes that now, other shareholders will share their opinions on the subject matter after viewing Marcatoâs presentation and put further pressure on the company.
Even though the fund is enthusiastic about the future of Buffalo Wild Wings (NASDAQ:BWLD), Mr. McGuire wrote that significant changes in the companyâs business practices are necessary for it to achieve its full potential and to attain the best possible shareholder value. Mr. McGuire said that his activist fundâs main focus is on the companyâs capital allocation decisions, which they discuss in detail in the presentation (which can be seen through the SEC filing link below), with the fund determining that the company lacks organizational efficiency and suitable analytical support.
Marcato Capital Management asked for the following changes: changes at the Board, including additional independent directors with practical operating experience, should shareholder approve; improvement of the companyâs operational quality (food, services, price/value perception, etc.); the ending of its âemerging brandsâ growth plans (no more taking chances with new restaurant concepts); and a profound increase in urgency, follow-through, and accountability.
Besides the above-mentioned changes, Mr. McGuire added another higher level issue that needs to be articulated: âthere is a glaring deficiency of understanding at the Company in how capital deployment relates to shareholder value creation. Yesterdayâs announcement of a $300 million share repurchase authorization further highlights this point, â he stated.
In the end, Mr. McGuire stated that they are certain about Buffalo Wild Wingsâ future success if management appropriately responds to the issues Marcato has raised in a timely manner, and that they are looking forward to further discussing those issues with the board and management.
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Buffalo Wild Wings is an owner and franchiser of sports bars and casual dining restaurants. Over the past 12 months, the companyâs stock has lost 14.25%. In its financial report for the second quarter of 2016, the company reported earnings per share of $1.27, slightly above the estimates of EPS of $1.26, and revenue of $490.18 million, below the estimates of $498.32 million. Lately, there has been a good deal of analyst ratings activity on Buffalo Wild Wingsâ stock; for starters, Jefferies Group reiterated its âHoldâ rating on the stock, with a price target of $135 (well below the stockâs current going rate of $168), BMO Capital Markets boosted its price target on the stock to $200 from $161.33 and has an âOutperformâ rating, and Deutsche Bank AG also boosted its price target, but to $155 from $145, while keeping its âHoldâ rating on it. There were also some downgrades on the stock, coming from Raymond James Financial Inc., which lowered its rating on Buffalo Wild Wingsâ stock to âMarket Performâ from âOutperformâ and Maxim Group, which dropped its rating to âHoldâ from âBuyâ, and has a price target of $170 on it. Finally, Credit Suisse Group AG upgraded its rating to âNeutralâ from âUnderperformâ and raised its price target on the stock to $165 from $130.
Some of the investors in our database that were bullish on Buffalo Wild Wings (NASDAQ:BWLD) at the end of the second quarter were Jim Simonsâ Renaissance Technologies, which held a position valued at $26.41 million, Bruce Kovnerâs Caxton Associates LP with a $21.32 million position, Ken Griffinâs Citadel Investment Group, and Dmitry Balyasnyâs Balyasny Asset Management. Investors that initiated new positions in the company during the quarter included Anand Parekhâs Alyeska Investment Group, which had built a $25.03 million position by the end of the quarter, Michael Barnes and Arif Inayatullahâs Tricadia Capital Management, which acquired a position worth $4.86 million, and Doug Gordon, Jon Hilsabeck and Don Jabroâs Shellback Capital.
Investors who lost optimism for Buffalo Wild Wings (NASDAQ:BWLD) and sold off their positions during the second quarter were Richard Chiltonâs Chilton Investment Company, which said goodbye to a position worth $11.52 million, and Sheetal Duggalâs Thrax Management, which dropped a position valued at $1.48 million at the end of March.
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Page 1 of 49 â SEC Filing
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 1)*
Buffalo Wild Wings, Inc.
(Name of Issuer)
Common Stock, no par value
(Title of Class of Securities)
119848109
(CUSIP Number)
 Richard T. McGuire III
Marcato Capital Management LP
Four Embarcadero Center, Suite 2100
San Francisco, CA 94111
(415) 796-6350
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
Copies to:
Richard M. Brand
Aly El Hamamsy
Cadwalader, Wickersham & Taft LLP
One World Financial Center
New York, NY 10281
(212) 504-6000
 August 17, 2016
 (Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box. â
Note:  Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits.  See Rule 13d-7 for other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting personâs initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed to be âfiledâ for the purpose of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section of the Act but shall be subject to all other  provisions of the Act  (however, see the Notes).
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