Sentinel and Caxton-Iseman recapitalize Buffets, Inc. and pay dividend to shareholders

NEW YORK, May 12, 2004 - Sentinel Capital Partners and Caxton-Iseman Capital, Inc. are pleased to announce a recapitalization of Buffets, Inc. and the payment of a $75 dividend to shareholders. Buffets, headquartered in Eagan, Minnesota, is the largest operator of high quality buffet-style restaurants in the United States with 396 restaurants in 38 states operating under the brand names Old Country Buffet and HomeTown Buffet.

Buffets announced today that it has priced an offering of its 13 7/8% senior discount notes due 2010 in a Rule 144A offering. Gross proceeds from the offering are $75 million. Credit Suisse First Boston was lead manager for the $75 million high yield debt financing. Buffets will use the cash proceeds from the offering of the senior discount notes primarily to make a dividend distribution to stockholders.

"This recapitalization is designed to enable Buffets shareholders an opportunity to partially realize on the substantial equity appreciation Buffets has generated to date while still preserving the opportunity to remain shareholders and benefit from future equity appreciation."

Buffets is the market leader of the $4.2 billion buffet/cafeteria segment. "We are delighted to have worked on this recap with Caxton-Iseman Capital, and we look forward to continuing to serve together on Buffets' Board of Directors and to assist the company's management team in every way possible," Mr. Lobel said.

Buffets is well positioned in the mid-scale dining segment and offers a convenient, value-priced selection of high quality food and excellent customer service. Buffets was an early innovator of the scatter-bar concept, in which food is presented on self-service islands from which customers select the items and portions of their choice. With innovations such as the scatter-bar system and all-inclusive pricing, Buffets' brands are synonymous with the modern buffet concept.

Buffets' formula of exceptional value, convenience, quality, and service has generated consistent growth in sales and profits. Management's strategic objective is to reinforce Buffets' position as the market leader in the buffet-style restaurant segment by expanding its core Old Country Buffet and Hometown Buffet concepts. Buffets will also selectively expand its complementary Tahoe Joe's steakhouse concept.

About Caxton-Iseman Capital
Caxton-Iseman Capital is a leading New York-based private equity investment firm specializing in leveraged buyouts. The firm's investment vehicles currently have $700 million of capital available to them for leveraged buyouts. Caxton-Iseman Capital is funded primarily by affiliates of Caxton Corporation, a New York investment firm whose affiliated companies have in excess of $3.5 billion of capital.