After bruising battles last year with activist investors, BJ’s Restaurants Inc. announced an agreement with one of its key supporters, Ronald Shaich.
The local casual dining chain on Jan. 2 announced a cooperation agreement with Shaich’s Act III Holdings LLC.
Shaich and his associates “are well regarded for their restaurant industry acumen and results,” BJ’s Chair Lea Anne Ottinger said in a statement.
Shaich was the founder in 1987 of Panera Bread, which he sold for more than $7 billion in 2017. He started Act III in 2018 as a $1 billion-plus “evergreen investment vehicle” funded by himself and other partners, which landed him a few board seats as well.
He’s currently chairman of Cava Group, one of the hottest restaurant chains with a $13.3 billion market cap. Act III’s investment portfolio also includes Tatte Bakery & Cafés, Life Alive Organic Cafés, and the Level99 entertainment group.
In 2020, Act III became a minority investor in BJ’s Restaurants (Nasdaq: BJRI) as part of a $70 million total investment from the Miami-based firm along with Baltimore-based T. Rowe Price Associates Inc.
T. Rowe currently holds a 14.6% stake in the restaurant company and Act III counts a 5.4% stake, according to BJ’s 2024 proxy statement.
At the time, Shaich called BJ’s “a company that is generating some of the highest average unit sales and guest traffic metrics in the industry.” Shaich was an adviser for BJ’s board for three years after the firm’s initial investment.
Now, Shaich returns to offer more support to interim CEO C. Bradford Richmond and President and Chief Concept Officer Lyle Tick, who were both appointed to their current positions after CEO Greg Levin exited in August 2024.
“We strongly support the actions that BJ’s board of directors has taken, including the appointment of new leadership to guide the company through its next chapter of growth and value creation,” Shaich said.
According to SEC filings, “the Act III Parties will make their personnel and management available to collaborate with and support the company’s management on key initiatives or organizational enhancements (including, without limitation, culinary, supply chain, marketing, design, technology and recruiting).”
“After engaging with BJ’s board and management, we are confident in the discipline and financial expertise that Mr. Richmond is bringing to the company and impressed by Mr. Tick’s vision and strategy for unlocking the full potential of the BJ’s brand. We fully supaport their focus and ambition and are excited to reaffirm our commitment to the company. We look forward to collaborating with BJ’s to help them exceed their goals,” Shaich added.
The agreement lasts through May 2027 and Act III has the option to acquire up to 876,949 shares of common stock. The investment firm, listed on the proxy filing as BJ’s Act III LLC, already has 1,251,949 shares as of June.
Investor Activity in 2024
Last year marked a wave of changes for BJ’s related to the company’s efforts to turn sales around.
Before being named interim CEO, Richmond had served on the board since February 2024. Following the departure of Levin, Richmond, who served as CFO of Olive Garden-parent company Darden Restaurants Inc. from 2006 to 2015, was tapped as interim. Tick, former brand president of Buffalo Wild Wings, joined the chain in September.
The executive changes came as Levin last year had entered into agreements with two activist funds, which analysts said was a surprise.
Investment firm Pleasant Lake Partners last year revealed its now 9.8% stake and initially urged BJ’s to sell itself in February. The fund later reached an agreement to cooperate with management and was allowed to add Richmond to the board.
PW Partners, which owns more than 5.4% of BJ’s common stock, said last March it would work to provide cost structure recommendations to the restaurant chain and its board as part of a six-month cooperation agreement.
The shares have climbed about 28% to $35.33 since a 52-week low in August. BJ’s currently counts a $805.7 million market cap.
