Page 7 of 12 – SEC Filing
The following constitutes
Amendment No. 1 to the Schedule 13D filed by the undersigned (“Amendment No. 1”). This Amendment No. 1 amends the Schedule
13D as specifically set forth herein.
| Item 1. | Security and Issuer. |
Item 1 is hereby
amended and restated to read as follows:
This statement relates
to the Common Stock, par value $0.001 per share (the “Shares”), of J. Alexander’s Holdings, Inc., a Tennessee corporation
(“J. Alexander’s” or the “Issuer”). The address of the principal executive offices of the Issuer
is 3401 West End Avenue, Suite 260, Nashville, Tennessee 37203.
| Item 3. | Source and Amount of Funds or Other Consideration. |
Item 3 is hereby
amended and restated to read as follows:
The Shares purchased
by each of Partners LP and Focus Fund were purchased with working capital (which may, at any given time, include margin loans made
by brokerage firms in the ordinary course of business) in open market purchases. The aggregate purchase price of the 800,000 Shares
beneficially owned by Partners LP is approximately $8,184,184, excluding brokerage commissions. The aggregate purchase price of
the 119,000 Shares beneficially owned by Focus Fund is approximately $1,214,612, excluding brokerage commissions.
| Item 4. | Purpose of Transaction. |
Item 4 is hereby amended
to add the following:
On October 19, 2017,
Marathon Partners delivered a second letter to the Issuer’s board of directors (the “Board”) following its review
of the preliminary merger proxy statement (the “Proxy”) filed by the Issuer on October 11, 2017 in connection with
the Special Meeting of Shareholders that will be held to consider the proposed merger (the “Transaction”) between
the Issuer and 99 Restaurants, LLC (“99 Restaurants”). In the letter, Marathon Partners expressed to the Board that
its already deep concerns and suspicions regarding the Transaction were exacerbated upon its review of the Proxy and that it remains
strongly opposed to the Transaction.
Marathon Partners
cited the significant deterioration in the financial performance of 99 Restaurants, which stands in stark contrast to the extremely
favorable projections for 99 Restaurants provided in the Proxy. Such rosy projections, says Marathon Partners, would require a
dramatic turnaround from current trends with a large jump in profits over the next three years, and would imply a share price
for the Issuer of approximately $20 to $23 by 2020.
Marathon Partners
stated that its concerns with 99 Restaurants’ poor financial performance include that payroll and benefits, its single largest
expense, has grown significantly faster than revenues in 2017 and is accelerating, causing a large decline in profits, and that
income from operations has declined by 16% year-to-date and by over 20% when the results are adjusted for pre-opening costs. Marathon
Partners stated in the letter that 99 Restaurants is poorly positioned for the current environment threatening the restaurant industry
given its concentration in the Northeast and its focus on a more price sensitive consumer.
Marathon Partners
further stated that if the Board and Fidelity National Financial, Inc. (“FNF”) actually believed these projections,
then Marathon Partners believes it would behoove them to induce the Issuer’s shareholders with value-protecting instruments,
such as contingent value rights, to help assure closure of a transaction that they view favorably. This would especially be true
of a transaction such as here, where Board independence, conflicts of interest, and other corporate governance concerns are so
readily apparent.
Marathon Partners
cited contingent value rights as an example of such a value-protecting instrument that would pay, in cash, the difference between
$15 and any shortfall of that number based on the future share price of the Issuer in 2020, and that would provide a strong inducement
for shareholders to support the Transaction.
| 7 |
