SOUTHLAKE, Texas (AP) — Del Frisco’s Restaurant Group Inc. is planning a secondary offering of 5 million shares of its common stock.
The Southlake, Texas, company, which owns and runs Del Frisco’s Double Eagle Steak House, Sullivan’s Steakhouse and Del Frisco’s Grille restaurants, said Tuesday that the shares are being offering by its biggest stockholder, an affiliate of Lone Star Funds.
Del Frisco’s won’t receive any proceeds from the stock sale.
The underwriters will have a 30-day option to buy up to an additional 750,000 shares.
Del Frisco’s also reported Tuesday that its second-quarter net income climbed as revenue improved at its Double Eagle Steak House and Grille locations. Adjusted earnings and revenue topped Wall Street’s expectations.
But its shares declined $1.48, or 6.6 percent, to $21.11 in morning trading. The stock has traded in a 52-week range of $11.73 to $23.22.
It’s not uncommon for a company’s stock to fall when a secondary stock offering is made, as it increases the number of shares outstanding. This dilutes the value of existing shares held by stockholders.