Fiesta Restaurant Group Inc., the owner of Pollo Tropical and Taco Cabana, is preparing to put itself up for sale, according to a report today in the New York Post.
Citing “a source close to the situation,” the Post said it expects to distribute information on the company to potential buyers soon and that there is early indication of interest from private-equity groups.
The company did not issue a comment on the report.
Word of a potential auction of the Dallas-based company comes just weeks after Fiesta announced the retirement of Tim Taft. It also follows the company’s decision to scuttle its plan to separate its two brands.
Last month, the activist investor JCP Investment Partnership, which has targeted restaurant companies in the past, such as J. Alexander’s and Jamba Juice, had taken a 6.2-percent stake in Fiesta. In its filing announcing the stake, JCP noted that it believes there are “significant operational and strategic opportunities” the company can use to increase shareholder value.
Fiesta has struggled to generate sales recently. Pollo Tropical recorded a 1.4-percent decline in same-store sales in the quarter ended July 3. Taco Cabana reported a 3.8-percent decline. The company’s stock price is down 24 percent this year before rising 10 percent on news of a potential sale. Last year, the stock price fell 50 percent.
Correction: Oct. 17, 2016 This story has been updated to reflect that the company did not issue a formal comment.
Contact Jonathan Maze at [email protected]
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