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For the second time in as many years Mill Road has made a bid for Kona Grill (KONA). The first offer in March 2008 was at $10.75 a share. On Monday, Mill Road offered $4.60 a share, up from the May 15 closing price of $2.29.


Based on where KONA is now trading relative to other casual dining companies and my EBITDA estimate for 2010, I would take nothing less than $5.50


In documents filed with the SEC Mill Road said: "The recent departure of the company's chairman and CEO has placed Kona at a crossroads. The company and its employees are facing a very difficult operating environment for restaurants without the leadership and vision that a permanent CEO should provide. ... We strongly believe that Kona has a significantly better chance of successfully addressing the competitive, leadership and capital issues as a private company."


It was not too long ago that senior management at OSI Partners Inc. made the same statement about being a private company. Given the trouble they are in, I don't think they would make that statement today!


More to come!