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Outback Steakhouse Parent Bloomin' Brands Mulling Strategic Alternatives

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Bloomin' Brands, Inc., the owner of Outback Steakhouse, said Wednesday it is exploring strategic alternatives that include selling itself. Shares of the company were gaining almost 10 percent in pre-market activity.

Dave Deno, Chief Executive Officer of Bloomin' Brands said despite gaining a good market share over the past few years, the current stock price does not reflect the value of the company, prompting the company to look for alternatives.

The casual dining restaurant company's board of directors has kept BofA Securities as its financial advisor.

In addition to Outback Steakhouse, Tampa, Florida-based Bloomin' Brands is the owner of other fast casual restaurants such as Carrabba's Italian Grill, Bonefish Grill, and Fleming's Prime Steakhouse & Wine Bar.

Bloomin' Brands has recently come under significant pressure from activist hedge fund Jana Partners to explore a sale of all or parts of the company. Jana Partners, which currently owns a 9 percent stake in Bloomin' Brands, had said it plans to push for changes at the company.

This is the second time that Jana has built a stake in Bloomin' Brands, after disclosing a meaningful stake in the company earlier in 2017.

Another activist investor, Barington Capital, has also pushed for major changes at Bloomin' Brands.

Both Jana and Barington Capital have called for Bloomin' Brands' spin-off of its smaller restaurant chains into a separate new company, and for another company to be focused on the largest brand, Outback Steakhouse.

In its latest quarterly results released on Wednesday, the company had posted increased third-quarter earnings of $9.25 million or $0.11 per share compared with $4.07 million or $0.04 per share in the year-ago period. Revenues also climbed to $967.14 million from $965.02 million last year. However, the U.S. comparable restaurant sales edged down 0.2 percent.

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