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Howard W. Penney's  Instablog

Howard has been a restaurant analyst since the early 1990's, and has been recognized as the top analyst in his sector by both the Wall Street Journal and Institutional Investor. Prior to Research Edge, Howard was a Managing Director at both FBR and at SunTrust Robinson Humphrey, after starting... More
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  • HOLD OUT FOR A HIGHER PRICE  0 comments
    May 20, 2009 06:57 AM | about stocks: KONA, BJRI, EAT

    For the second time in as many years Mill Road has made a bid for Kona Grill (KONA). The first offer in March 2008 was at $10.75 a share. On Monday, Mill Road offered $4.60 a share, up from the May 15 closing price of $2.29.


    Based on where KONA is now trading relative to other casual dining companies and my EBITDA estimate for 2010, I would take nothing less than $5.50


    In documents filed with the SEC Mill Road said: "The recent departure of the company's chairman and CEO has placed Kona at a crossroads. The company and its employees are facing a very difficult operating environment for restaurants without the leadership and vision that a permanent CEO should provide. ... We strongly believe that Kona has a significantly better chance of successfully addressing the competitive, leadership and capital issues as a private company."


    It was not too long ago that senior management at OSI Partners Inc. made the same statement about being a private company. Given the trouble they are in, I don't think they would make that statement today!


     

    Themes: Restaurants Stocks: KONA, BJRI, EAT
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