Business

Fiesta Restaurant preps for sale

The Fiesta Restaurant Group is quietly alerting potential suitors that it intends to put itself up for sale, The Post has learned.

The Dallas-based restaurant chain, which operates 336 eateries under the Taco Cabana and Pollo Tropical nameplates, is expected to distribute sales books soon, according to a source close to the situation.

There has been some early indication of interest from private equity firms in the $717 million market cap business, a source who advises private equity firms said.

Golden Gate Capital, which owns California Pizza Kitchen and Red Lobster, is said to be intrigued by the expected opportunity, a source familiar with its thinking said.

Activist investor JCP Investment Partnership — led by Bradley Radoff, a former Third Point executive, and Josh Schechter, a former Steel Partners executive — revealed on Sept. 19 it owns a 6.2 percent stake in Fiesta.

JCP in recent years succeeded in forcing two targeted companies to engineer sales. In 2014, it successfully orchestrated The Pantry convenience store sale, and this year engineered a CST Brands sale.

JCP said it believed “significant operational and strategic opportunities are available to the issuer to enhance stockholder value,” the filing said.

Fiesta announced Sept. 27 that it was suspending its previously announced separation of Taco Cabana and that its chief executive, Tim Taft, who had already said he was retiring at the end of the year, would move up his departure date.

Taft left on Sept. 30.

The company named Danny Meisenheimer, chief operating officer of Pollo Tropical, as interim CEO.

At the same time, Todd Coerver, the chief operating officer of Taco Cabana, resigned.

The company’s shares rose 5.8 percent Friday, to $26.88, after nypost.com broke the news that Fiesta was about to put itself on the block.

Shares are down 6.7 percent year-to-date.

Traffic at Taco Cabana restaurants fell 5.5 percent in the second quarter, while at Pollo Tropical, customer traffic declined 2.6 percent.

Overall, profits in the six months ended July 3 fell 13.5 percent to $18.8 million, or 70 cents a share, from the same period last year.

Fiesta declined comment. Golden Gate did not return calls seeking