Denny’s tells shareholders proxy fight leaders just advancing own agenda

Denny’s slams investors leading proxy fight

SPARTANBURG, S.C. — Denny’s Corp. is telling shareholders that investors waging a proxy fight are doing so for their own personal gain and don’t have the company’s interest in mind.

“The dissident group is just plain wrong on the facts,” the restaurant chain told shareholders in a letter sent Wednesday. “Not surprisingly, this group has chosen to play fast and loose with the truth.”

The investors, who call themselves the Committee to Enhance Denny’s, sent a letter to shareholders Tuesday criticizing the restaurant chain’s “culture of wasteful spending,” its loss of customers to competitor IHOP, along with its Super Bowl promotions and the lack of stock ownership by members of the board. The letter was signed by Jonathan Dash, David Makula and Patrick Walsh, who represent Oak Street Capital Management and Dash Acquisitions.

They say their board slate would work to cut costs by $15 million, adjust management’s bonus system and work to reverse trends keeping diners away from the chain’s 1,500 locations.

Denny’s said the investors only recently acquired 6.3 percent of Denny’s outstanding shares and have now chosen “to wage a highly disruptive proxy fight” at the company’s meeting on May 19. The board has 11 members and shareholders will vote on the slate of directors during the meeting.

The group wants to unseat CEO Nelson Marchioli, board Chairwoman Debra Smithart-Oglesby and Robert Marks, former chairman of the company, and put up Dash, Makula and Walsh as its own slate. The group said in its own news release Wednesday it has created a site at www.enhancedennys.com for shareholders.

Denny’s has asked shareholders to reject those three nominees and vote for its eight board nominees.

The company earlier this year reported that it had reversed fourth quarter losses from the prior year by trimming operating costs.

The company said it is making strides in its business by making more locations franchises, reducing debt and costs and pursuing a new partnership to put restaurants in Pilot/Flying J travel centers.

It asked shareholders to keep the current leadership in place so it can advance those plans.

“Do not allow a group of hedge fund managers to threaten our progress and use your company to serve their own personal agenda,” the company said.

Shares of Denny’s, based in Spartanburg, S.C., rose a penny to $3.90 in midday trading Wednesday.