Scout Capital Ups Stake In DineEquity To 6.7 Percent

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Hedge fund, Scout Capital Management in its recent 13D filing disclosed that it has a 6.62 percent stake or 1,280,321 shares in the restaurant franchise operator DineEquity Inc (NYSE:DIN).

Scout Capital Ups Stake In DineEquity To 6.7 Percent

This enhancement for Scout Capital represents a hike of 90.14 percent from the 673,353 shares held at the end of the last quarter ending December 31, 2012.

DineEquity Inc (NYSE:DIN) is the owner of famous restaurants Applebee’s and IHOP.

Scout Capital Management, L.L.C. serves as investment manager to Scout Capital Partners II, L.P. and Scout Capital Long Term, L.P. and the Cayman Islands exempted companies Scout Capital Master Fund, Ltd. and Scout Capital Long Term Master, Ltd.

In its 13D filing, Scout Capital indicated that it acquired the Common Shares on behalf of the Funds for investment purposes.

Delaware based Scout Capital disclosed that it has engaged and expects to continue to engage in discussions with senior management of DineEquity with respect to the restaurant franchise operator’s  optimal capital structure, debt refinancing, timing and magnitude of share repurchases, management compensation metrics and merger and acquisition strategies, among other matters.

Scout Capital also indicated that it may have engaged, or may in the future also engage, in discussions with management, the board of directors, other stockholders of DineEquity and other relevant parties concerning the business, management, operations, assets, financial condition, governance, strategy and future plans of DineEquity.

In its 13D filing, Scout Capital indicated that it intends to review its investment in DineEquity on a continuing basis. The hedge fund also disclosed that depending on various factors, including DineEquity’s financial position and strategic direction, it may further enhance its stake in the restaurant franchise operator.

Interestingly during December 2012, another hedge fund Marcato Capital Management recommended several steps for DineEquity Inc (NYSE:DIN) to maximize its equity value and distribute $6 annual dividend to shareholders.

DineEquity Inc (NYSE:DIN) recently reported mixed results for the first quarter as cost controls compensated for soft same-store sales, a key measure of financial health. Recently it has reached its goal of being 99 percent franchised that would maximize profit, while minimizing overhead and cash-flow volatility.

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About the Author

Mani is a Senior Financial Consultant. He has worked in Senior Management role in large banking, financial and information technology organizations. He has provided solutions for major banking and securities firms across the globe in the area of retail, corporate and investment banking. He holds MBA (Finance) and Professional Management Accounting Qualifications. His hobbies are tracking global financial developments and watching sports

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