Filing Details

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT

TO § 240.13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO

§ 240.13d-2(a)

(Amendment No. 3)¹

J. Alexander’s Holdings, Inc.

(Name of Issuer)

Common Stock, $0.001 par value

(Title of Class of Securities)

46609J106

(CUSIP Number)

MARIO D. CIBELLI

C/O Marathon Partners Equity Management, LLC

One Grand Central Place

60 East 42nd Street, Suite 2306

New York, New York 10165

(212) 490-0399

 

ANDREW FREEDMAN, ESQ.

OLSHAN FROME WOLOSKY LLP

1325 Avenue of the Americas

New York, New York 10019

(212) 451-2300

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

 

February 27, 2018

(Date of Event Which Requires Filing of This Statement)

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box ¨.

Note:  Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits.  See § 240.13d-7 for other parties to whom copies are to be sent.

 

 

1              The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

	1		NAME OF REPORTING PERSON
				Marathon Partners Equity Management, LLC
	2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP															(a) ☐
																		(b) ☐
	3		SEC USE ONLY
	4		SOURCE OF FUNDS
				AF
	5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)															☐
	6		CITIZENSHIP OR PLACE OF ORGANIZATION
				DELAWARE
NUMBER OF				7		SOLE VOTING POWER
SHARES
BENEFICIALLY							- 0 -
OWNED BY				8		SHARED VOTING POWER
EACH
REPORTING							1,005,000
PERSON WITH				9		SOLE DISPOSITIVE POWER
							- 0 -
				10		SHARED DISPOSITIVE POWER
							1,005,000
	11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
				1,005,000
	12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES															☐
	13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
				6.8%
	14		TYPE OF REPORTING PERSON
				IA

  

	1		NAME OF REPORTING PERSON
				Mario D. Cibelli
	2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP															(a) ☐
																		(b) ☐
	3		SEC USE ONLY
	4		SOURCE OF FUNDS
				AF
	5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)															☐
	6		CITIZENSHIP OR PLACE OF ORGANIZATION
				USA
NUMBER OF				7		SOLE VOTING POWER
SHARES
BENEFICIALLY							- 0 -
OWNED BY				8		SHARED VOTING POWER
EACH
REPORTING							1,005,000
PERSON WITH				9		SOLE DISPOSITIVE POWER
							- 0 -
				10		SHARED DISPOSITIVE POWER
							1,005,000
	11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
				1,005,000
	12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES															☐
	13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
				6.8%
	14		TYPE OF REPORTING PERSON
				IN

  

 

	1		NAME OF REPORTING PERSON
				Marathon Focus Fund L.P.
	2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP															(a) ☐
																		(b) ☐
	3		SEC USE ONLY
	4		SOURCE OF FUNDS
				WC
	5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)															☐
	6		CITIZENSHIP OR PLACE OF ORGANIZATION
				DELAWARE
NUMBER OF				7		SOLE VOTING POWER
SHARES
BENEFICIALLY							- 0 -
OWNED BY				8		SHARED VOTING POWER
EACH
REPORTING							130,000
PERSON WITH				9		SOLE DISPOSITIVE POWER
							- 0 -
				10		SHARED DISPOSITIVE POWER
							130,000
	11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
				130,000
	12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES															☐
	13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
				0.9%
	14		TYPE OF REPORTING PERSON
				PN

  

 

	1		NAME OF REPORTING PERSON
				Cibelli Research & Management, LLC
	2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP															(a) ☐
																		(b) ☐
	3		SEC USE ONLY
	4		SOURCE OF FUNDS
				AF
	5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)															☐
	6		CITIZENSHIP OR PLACE OF ORGANIZATION
				DELAWARE
NUMBER OF				7		SOLE VOTING POWER
SHARES
BENEFICIALLY							-0-
OWNED BY				8		SHARED VOTING POWER
EACH
REPORTING							130,000
PERSON WITH				9		SOLE DISPOSITIVE POWER
							-0-
				10		SHARED DISPOSITIVE POWER
							130,000
	11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
				130,000
	12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES															☐
	13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
				0.9%
	14		TYPE OF REPORTING PERSON
				OO

  

 

	1		NAME OF REPORTING PERSON
				Marathon Partners L.P.
	2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP															(a) ☐
																		(b) ☐
	3		SEC USE ONLY
	4		SOURCE OF FUNDS
				WC
	5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)															☐
	6		CITIZENSHIP OR PLACE OF ORGANIZATION
				NEW YORK
NUMBER OF				7		SOLE VOTING POWER
SHARES
BENEFICIALLY							- 0 -
OWNED BY				8		SHARED VOTING POWER
EACH
REPORTING							875,000
PERSON WITH				9		SOLE DISPOSITIVE POWER
							- 0 -
				10		SHARED DISPOSITIVE POWER
							875,000
	11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
				875,000
	12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES															☐
	13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
				5.9%
	14		TYPE OF REPORTING PERSON
				PN

  

The following constitutes Amendment No. 3 to the Schedule 13D filed by the undersigned (“Amendment No. 3”). This Amendment No. 3 amends the Schedule 13D as specifically set forth herein.

 

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 875,000 Shares beneficially owned by Partners LP is approximately $8,928,554, excluding brokerage commissions. The aggregate purchase price of the 130,000 Shares beneficially owned by Focus Fund is approximately $1,326,299, excluding brokerage commissions.

Item 4.

Purpose of Transaction.

Item 4 is hereby amended to add the following:

On February 27, 2018, Marathon Partners delivered a letter to the Issuer’s board of directors (the “Board”) following the results of the Issuer’s Special Meeting of Shareholders in which shareholders rejected the Board-recommended acquisition (the “Transaction”) of 99 Restaurants, LLC (“99 Restaurants”) by the Issuer. In the letter, addressed to the Chairman of the Board Frank Martire, Marathon Partners cited the Issuer’s share price underperformance and urged the Chairman to review strategic options in the best interests of all shareholders. Marathon Partners also recommended that the Board appoint new, independent directors in order to restore accountability in light of its conflicts of interests relating to the Transaction. Further, Marathon Partners requested that the Issuer establish a special committee of independent directors and engage an independent investment bank to explore strategic alternatives.

Marathon Partners cited the continued stock price underperformance in which the Issuer underperformed many peers and various equity indices. Marathon Partners further stated that, since its inception as a public company, the Issuer has returned 8.4% while the S&P 500 Total Return Index and S&P 500 Total Return Restaurant Index have returned 55.2% and 36.6%, respectively. The letter noted that with the Issuer’s shares trading at approximately $10.50, shareholders have suffered nearly two and a half years of extremely low returns.

In the letter, Marathon Partners emphasized the Chairman’s role in protecting the best interests of outside shareholders and noted that, given the Chairman’s presence on other public company boards, the Chairman should appreciate the responsibility of serving as a fiduciary to shareholders in the context of the conflicted and undervalued Transaction.

Marathon Partners further noted its belief that additional independent directors, free from conflicts arising from the Transaction, should be appointed to the Board to ensure fairness for all shareholders. Marathon Partners stated that such newly appointed independent Board members could seek to maximize shareholder value by leveraging the Issuer’s potential for growth, balance sheet optionality, and opportunity for margin improvement in order to assess potential interest in the Issuer from outside buyers. Marathon Partners reiterated its belief that a full and open auction process held by a properly incentivized investment bank could yield multiple parties, and that such a process would produce a valuation significantly higher than the $11 used by the Board in valuing the Issuer in the Transaction. This would, according to Marathon Partners, serve to close the gap between the public and private value of the Company.

Marathon Partners concluded the letter by stating its view that the entire Board should treat any potential inbound inquiries to purchase the Issuer fairly and with the same vigor as with the Transaction. Marathon Partners stated that the disinterested shareholders’ rejection of the Board-recommended Transaction sends a strong signal for strategic change to the Board, and that shareholders would likely support a review of alternatives to better serve their interests.

The full text of the letter is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 5.

Interest in Securities of the Issuer.

Items 5(a)-(c) are hereby amended and restated to read as follows:

The aggregate percentage of Shares reported owned by each Reporting Person is based upon 14,695,176 Shares outstanding, which is the total number of Shares outstanding as of the close of business on December 19, 2017, the record date for the Special Meeting, as reported in the Issuer’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 2, 2018.

A.

Marathon Partners

(a)

Marathon Partners, as the investment manager of each of Partners LP and Focus Fund, and the general partner of Partners LP, may be deemed the beneficial owner of the (i) 875,000 Shares owned by Partners LP and (ii) 130,000 Shares owned by Focus Fund.

Percentage: Approximately 6.8%

(b)

1. Sole power to vote or direct vote: 0 2. Shared power to vote or direct vote: 1,005,000 3. Sole power to dispose or direct the disposition: 0 4. Shared power to dispose or direct the disposition: 1,005,000

 

(c)

Marathon Partners has not entered into any transactions in the Shares during the past sixty days. The transactions in the Shares on behalf of each of Partners LP and Focus Fund during the past sixty days are set forth in Schedule A and are incorporated herein by reference.

B.

Mr. Cibelli

(a)

Mr. Cibelli, as the managing member of each of Cibelli Research and Marathon Partners, may be deemed the beneficial owner of the (i) 875,000 Shares owned by Partners LP and (ii) 130,000 Shares owned by Focus Fund.

Percentage: Approximately 6.8%

(b)

1. Sole power to vote or direct vote: 0 2. Shared power to vote or direct vote: 1,005,000 3. Sole power to dispose or direct the disposition: 0 4. Shared power to dispose or direct the disposition: 1,005,000

(c)

Mr. Cibelli has not entered into any transactions in the Shares during the past sixty days. The transactions in the Shares on behalf of each of Partners LP and Focus Fund during the past sixty days are set forth in Schedule A and are incorporated herein by reference.

C.

Focus Fund

(a)

As of the close of business on March 1, 2018, Focus Fund beneficially owned 130,000 Shares.

Percentage: Approximately 0.9%

(b)

1. Sole power to vote or direct vote: 0 2. Shared power to vote or direct vote: 130,000 3. Sole power to dispose or direct the disposition: 0 4. Shared power to dispose or direct the disposition: 130,000

(c)

The transactions in the Shares by Focus Fund during the past sixty days are set forth in Schedule A and are incorporated herein by reference.

D.

Cibelli Research

(a)

Cibelli Research, as the general partner of Focus Fund, may be deemed the beneficial owner of the 130,000 Shares owned by Focus Fund.

Percentage: Approximately 0.9%

(b)

1. Sole power to vote or direct vote: 0 2. Shared power to vote or direct vote: 130,000 3. Sole power to dispose or direct the disposition: 0 4. Shared power to dispose or direct the disposition: 130,000

 

(c)

Cibelli Research has not entered into any transactions in the Shares during the past sixty days. The transactions in the Shares on behalf of Focus Fund during the past sixty days are set forth in Schedule A and are incorporated herein by reference.

E.

Partners LP

(a)

As of the close of business on March 1, 2018, Partners LP beneficially owned 875,000 Shares.

Percentage: Approximately 5.9%

(b)

1. Sole power to vote or direct vote: 0 2. Shared power to vote or direct vote: 875,000 3. Sole power to dispose or direct the disposition: 0 4. Shared power to dispose or direct the disposition: 875,000

(c)

The transactions in the Shares by Partners LP during the past sixty days are set forth in Schedule A and are incorporated herein by reference.

Each Reporting Person, as a member of a “group” with the other Reporting Persons for the purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, may be deemed the beneficial owner of the Shares directly owned by the other Reporting Persons. Each Reporting Person disclaims beneficial ownership of such Shares except to the extent of his or its pecuniary interest therein.

Item 7.

Material to be Filed as Exhibits.

Item 7 is hereby amended to add the following exhibit:

99.1

Letter to the Chairman of the Board of Directors, dated February 27, 2018.

 

SIGNATURES

After reasonable inquiry and to the best of his knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct.

Dated: March 1, 2018

 

	Marathon Partners L.P.
	By:	Marathon Partners Equity Management, LLC, its General Partner
	By:	/s/ Mario D. Cibelli
		Name:	Mario D. Cibelli
		Title:	Managing Member

 

	Marathon Focus Fund L.P.
	By:	Cibelli Research & Management, LLC, its General Partner
	By:	/s/ Mario D. Cibelli
		Name:	Mario D. Cibelli
		Title:	Managing Member

 

	Cibelli Research & Management, LLC
	By:	/s/ Mario D. Cibelli
		Name:	Mario D. Cibelli
		Title:	Managing Member

 

	Marathon Partners Equity Management, LLC
	By:	/s/ Mario D. Cibelli
		Name:	Mario D. Cibelli
		Title:	Managing Member

 

	/s/ Mario D. Cibelli
	MARIO D. CIBELLI

 

SCHEDULE A

Transactions in the Shares of the Issuer During the Past Sixty Days

Nature of the Transaction

Securities Purchased/(Sold)

Price Per Share($)

Date of Purchase / Sale

 

Marathon Focus Fund L.P.

 

Purchase of Common Stock	5,000	10.5462	02/02/2018
Purchase of Common Stock	5,000	9.6941	02/21/2018

 

Marathon Partners L.P.

 

Purchase of Common Stock	25,000	10.5462	02/02/2018
Purchase of Common Stock	25,000	9.4883	02/06/2018
Purchase of Common Stock	25,000	9.7403	02/07/2018