Bob Evans Farms' shareholders urge sale of land, buildings to invest in expanding food products business

Lorena Madrigal

LOS ANGELES , September 19, 2011 (Industry Intelligence) – Shareholders G Asset Management and Capstone Equities Capital Management LLC encouraged Bob Evans Farms Inc. to sell its land and buildings to free up cash for the expansion of its food products business, Bloomberg reported Sept. 19.

As of June, the family-restaurant chain owned 486 of its Bob Evans’ restaurants and leased 77 of them; 138 of its 145 Mimi’s Café properties were also leased. The company also owned manufacturing plants and a distribution center for its food products segment.

G Asset President Michael Glickstein said the company would be able to rent back its properties after the sale, under a sale-leaseback arrangement. Hiring an investment bank and adding a real estate expert to the board were included in G Asset’s recommendations to the company, reported Bloomberg.

As of July 29, Bob Evans owned $1.68 billion in plant, property, and equipment.

The shareholders wrote a letter to the management on Sept. 16 stating the company’s real estate value was not represented in its share price, which has fallen 9.9% as of Sept. 16. On Sept. 19 shares reached $29.10, falling another $0.60, or 2%.

Steven Davis, Bob Evans’ CEO sought to expand the food products segment after restaurant sales continued to fall for three straight years. Davis said in August the company might consider using its real estate to fund the expansion.

Capstone owns 2,920 of the company’s shares, according to Bloomberg data from April 30, while G Asset declined to release its share of ownership.

The primary source of this article is Bloomberg, New York, New York, on Sept. 19, 2011.

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