Denny’s shares drop, Chicago investor thwarted

Posted May 19, 2010 at 1:29 p.m.

Dow Jones Newswires | Denny’s Corp. appears to have fought off a bruising challenge for its board seats from a group led by Chicago-based activist investor Oak Street Capital Management. Denny’s shares, which were already down earlier, fell further following
the filing. Shares are now changing hands at $3.09, down 8.9 percent.

Dissident investors said they don’t believe any of their three nominees
were elected to Denny’s board based on the proxy votes they received,
the group disclosed in a Securities and Exchange Commission filing

The activist group, led by Oak Street and Dash Acquisitions LLC, said
in the filing that they reserve all their rights related to the vote,
pending the official results.

Denny’s held its annual shareholder meeting earlier Wednesday. A
spokesman for the chain said results are being certified and an
official announcement will be made within a week.

“We look forward to announcing the final result of the election and to
applying our entire focus to moving the brand and the business forward
to maximize stockholder value,” spokesman Michael Fox told Dow Jones

The family-dining chain has been challenged by the activist group,
which has claimed that Denny’s has been mismanaged over the past
decade, resulting in weak sales and loss of market share to competitors.

The company has defended its strategy and warned that the dissidents
want to take control of Denny’s for use as an acquisition vehicle.

The tenor of the battle had turned more contentious in recent days, as
Denny’s Franchisee Association has accused the activists of obtaining
and circulating confidential documents to make their case to
shareholders. The activist group, which own 7.1 percent of outstanding
shares, denied those claims.


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