Dive Brief:

• Bloomin' Brands and Jana Partners have come to an agreement, according to a press release. Bloomin' will appoint two independent directors and the investor has agreed to customary standstill and voting commitments.
• The two new independent directors will start on the board of directors on July 1. John Gainor, who has served on Jack in the Box's board of directors since 2019 and was previously president and CEO of International Dairy Queen, and Scott Ostfeld of Jana Partners are the two new appointees. Bloomin's board will consist of 10 members. 
• Under the agreement, Jana Partners will withdraw its Jan. 30 notice of its intent to propose two directors during the 2020 Annual Meeting. During a cooperation period of 60 days, Jana will not acquire ownership interest of 14.99% or greater of the company's stock, sell securities of the company to a third party that would result in the third party owning more than 4.9% of stock, will not propose or support a proposal for transaction involving Bloomin', nor seek or propose any influence or control over management or company policies, among other customer standstill provisions, according to an SEC filing.

Dive Insight:

Bloomin' Brands is the latest casual dining chain to come to an agreement with an activist investor. In late March, Red Robin reached an agreement with its own activist investor and appointed a mutually agreed upon independent director after nearly a year of back and forth over the company's future.  Much like Red Robin, which underwent significant leadership changes over the last year, Bloomin' Brands has dramatically changed leadership and strategy in the last few months.

Jana Partners began pressuring Bloomin' Brands in September to sell part or all of the company, just over a year after another investor, Barrington Capital Group, also pressured the company into a spinoff. In November, Bloomin' executives said during a conference call with investors that it was considering strategic alternatives, including a sale of the company, and a few months later, it said it was close to selling its Brazilian Outback Steakhouse business. 

In February, it shook up senior management by consolidating positions with Greg Scarlett becoming EVP and chief operating officer of casual restaurants in charge of Outback, Carrabba's and Bonefish Grill, which were previously managed by three separate executives. It also named Brett Patterson as president of Outback Steakhouse. Former CEO Elizabeth Smith stepped down from her position as executive chairman as well. 

"We are encouraged by the steps the company has been taking, including these director additions, and by the board's ongoing commitment to exploring all avenues to create stockholder value," Barry Rosenstein, Jana Partners managing partner, said in the press release. 

While this agreement ends the company's latest brush with an activist investor, the company isn't out of the woods yet, especially with the novel coronavirus pandemic taking a steep toll on casual and full-service dining chains. It has shifted to carryout and delivery and is only offering in-restaurant dining in limited areas, according to a press release. With competitors reporting double-digit declines in same-store sales in March, Bloomin' and other full-service chains will likely reveal similar results, and could face additional investor pressures in the near future.