The Texas-based parent company of fast-food restaurant chains Taco Cabana and Pollo Tropical has named a new CEO as it faces a potential hostile takeover by a Houston-based activist investor.
Addison-based Fiesta Restaurant Group’s board of directors has named Richard Stockinger, former CEO and president of the Japanese restaurant company Benihana Inc., as its new CEO, the company said Monday. Fiesta had been without a permanent chief executive since CEO Timothy Taft left the company in September.
“The opportunity at Fiesta is extraordinary,” Stockinger said in a news release. “The competitive positioning and potential upside of both Pollo Tropical and Taco Cabana makes me optimistic about the future of the company.”
Fiesta’s lack of a permanent CEO, in part, led Houston-based activist investor JCP Investment Management to announce a push to get three candidates on Fiesta’s board earlier this month. JCP cited the company’s “misguided” decision to plug more than $70 million into efforts to expand the Pollo Tropical brand in Texas, disagreements with Fiesta about Taco Cabana’s growth potential and the board’s makeup and governance issues as grounds for a board shakeup.
JCP also noted that there were rumors that Fiesta could enter a “strategic review process” — generally indicating that it’s considering a sale.
Fiesta said Monday the company had “evaluated a range of strategic alternatives” including a possible sale of the company, but abandoned the sale in favor of hiring a permanent CEO after noting “soft company performance and a weak industry outlook.”
Fiesta posted a fourth-quarter profit of $2.4 million, or 9 cents a share. Earnings, adjusted for asset impairment costs and nonrecurring costs, were 27 cents per share. The company saw revenue of $171.3 million for the period.
Fiesta shares have fallen 13 percent since the beginning of the year. In the final minutes of trading on Monday, shares hit $25.95, a drop of 26 percent in the last 12 months.
The Associated Press contributed to this report.
More Fiesta Restaurant Group coverage:
Activist investor launches proxy fight with Taco Cabana, Pollo Tropical owner
Fiesta Restaurant Group to close 10 Pollo Tropical locations
Parent company of Taco Cabana, Pollo Tropical posts $4.5 million loss
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