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Checkers meeting omits one small detail

By SCOTT BARANCIK
Published May 19, 2005

Investment bank? What investment bank?

Two days after Checkers Drive-In Restaurants said it hired Citigroup Global Markets to explore a possible sale or other strategic changes, the Tampa burger chain held its annual shareholders meeting.

Somehow, the hiring of Citigroup never came up Wednesday.

President and CEO Keith Sirois didn't mention it in his address at the DoubleTree Hotel on W Cypress Street in Tampa. Neither did the chief financial officer or marketing director. The issue might have been raised in a question-and-answer segment, if there had been one.

By the time the meeting ended, shareholders E.M. and Kay Sanford, an Aurora, Colo., couple who winter in Pinellas County, still didn't know Checkers had signed Citigroup to a one-year contract for the purpose of brainstorming ways to improve investor returns.

A good idea? "With Checkers, I never know," E.M. Sanford said. "I hope Citigroup doesn't charge them too much." Sanford said he's still angry at the 1-share-for-12 reverse stock split the company undertook in 1999.

Shareholder Dan Harvey, owner of Harvey's 4th Street Grill in St. Petersburg and a former Checkers franchisee, said he was pleased that Monday's new release about Citigroup drove up Checkers' stock price 12 percent that day. But he called hiring the firm a "waste of money." Checkers' stock closed Wednesday at $13.99, up 2 percent.

"(CEO Keith Sirois') approach of slow growth and paying down debt is great," Harvey said. "How much are they (Citigroup) charging us for information we already know ourselves?"

Burt Sugarman, Checkers' longest-serving director and its sixth-largest shareholder with a 5.9 percent stake, did little to elucidate the thinking behind Citigroup's hiring, or whose idea it was.

"I cannot say what the board did in private session," he said shortly before walking away. "If you read (Monday's) press release, it says it all. Don't be scared of the press release."

At least one mystery was solved after Wednesday's meeting.

Asked why Checkers officials had not mentioned Citigroup - whose hiring could lead to a major acquisition, management buyout, or any number of key strategic shifts - chairman Peter O'Hara said it was simple.

The hiring of an investment bank took place in 2005, O'Hara said. The shareholders were there to review 2004.

[Last modified May 19, 2005, 00:43:18]