Clinton Group Embraces Carrol’s Restaurants

Sep 12 2007 | 11:32am ET

Activist investor the Clinton Group is opening its arms to Carrol’s Restaurant Group, the largest Burger King franchisee, and advising the fast-food operator that it can always go home again, or return to privatization.    The New York-based hedge fund on Sept. 7 sent a letter to Carrol’s chairman and CEO, Alan Vituli, stating that it believes the market has “misunderstood the issuer's story and growth prospects since its IPO pricing last year.” The letter further noted that the company “trades at a substantial discount to its peer group and to restaurant M&A multiples.”

And if the company’s stock price doesn’t appreciate, the firm said “it would be happy to help the issuer explore more broad based strategic alternatives including a return to life as a delisted private company, or it would consider an appointment to the issuer's board of directors.”

Last month, Carrols said its profits for 2007 will fall short of Wall Street's expectations with earnings between 73 cents to 78 cents per share – analysts expected earnings more in line with 82 cents per share. The company is trading at $11.41 at press time.

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