An investment firm with an activist track record has quickly built a $5 million stake in J. Alexander’s Holdings and says it wants to see changes at the restaurant operator.
The managers of Hill Path Capital have filed papers with the Securities and Exchange Commission saying they control 6 percent of J. Alexander’s and have acquired all of their roughly 900,000 shares of the local company in the past six weeks. They paid an average of about $5.33 for their shares, which were changing hands Tuesday (Ticker: JAX) at $5.64.
Hill Path is led by Scott Ross, a former partner at Apollo Global Management who launched his firm in 2014 and who last year raised $359 million for his second fund. Hill Path’s public-company holdings are very concentrated: Its 2020 filings show investments in only two other consumer-spending plays, Dave & Buster’s and SeaWorld Entertainment. The stake in the latter was valued at more than $400 million at the end of June, with the stake in the former at nearly $30 million.
Ross did not respond to a request for comment Tuesday, and his filing doesn’t detail just how his vision for J. Alexander’s is different. The company’s leaders earlier this year said they had paused efforts to sell the company amid the pandemic but last month voiced optimism about a rebound in diner activity.
J. Alexander’s leaders did not respond to a request for comment prior to publication.
Hill Path’s filing makes it the latest in a series of investors in recent years that have pushed the J. Alexander’s team to change its priorities in one way or another. Most recently, Ohio investment firm Ancora Advisors sought to buy J. Alexander’s and traded barbs with management before burying the hatchet and taking a board seat.
Before that, New York-based Marathon Partners Equity Management led a successful campaign against execs’ plan to buy 99 Restaurants from Cannae Holdings, the successor to the company that also owned J. Alexander’s for several years last decade. And, starting in late 2011 and until J. Alexander’s was acquired by American Blue Ribbon Holdings nearly a year later, Atlanta investors Privet Fund criticized management’s running of the company.