BLMN - Outback Owner Bloomin's DoorDash Alliance Yields Tender Juicy Profits
Bloomin' Brands (NASDAQ: BLMN), owner of restaurant brands Outback Steakhouse and Carrabba's Italian Grill along with several lesser lights, recently enjoyed a stock value boost after announcing a plan to sell itself. Now, just a few weeks later, CEO David Deno has stated a sale of the company looks unlikely. However, despite the flip-flop, Bloomin' seemingly came up smelling like roses again to people investing in restaurant stocks, thanks to favorable metrics in Bloomin's Q4 earnings report, including a blossoming partnership with DoorDash.
Investors signaled their approval of a major change in Bloomin's strategic direction and even ownership back in 2019. First, Bloomin's share price increased sharply in August 2019 when activist investment firm JANA Partners announced that it would seek more seats on the company's board. JANA is noted for gaining control of struggling companies in this way, streamlining them into profitability, then selling them. It did precisely this in 2017 with Whole Foods, assuming effective direction of the enterprise and steering it into an acquisition by Amazon. Bloomin's stock surged again in November when its Q3 earnings report declared an intention to put itself up for sale.
Now, just a single quarter later, David Deno used the Bloomin' Brands Q4 earnings call to remark that "at this point in time, nothing compelling has materialized in terms of an outright sale of the company." Instead, he stressed the potential of selling its Brazilian branch of the Outback Steakhouse brand. Though Bloomin' is tight-lipped about the details, Brazilian newspaper Valor Economico claims the company has selected three bidders for the final round. The article suggested the business is worth around $472 million, so Bloomin' could receive a significant cash boost if the sale is finalized.