Biglari eyes seat again on Cracker Barrel board
Updated Aug 20, 2013 at 11:02 AM
Cracker Barrel Old Country Store Inc. officials confirmed Sardar Biglari and one of his associates plan to seek election to the Lebanon-based restaurant and retail chain's board, which becomes the latest round in a long-running fight.
Cracker Barrel also faced proxy contests in 2011 and 2012 from Biglari Holdings Inc., which Cracker Barrel executives noted were rejected by its shareholders by significant margins. The company said in a statement Monday the board would consider Mr. Biglari's submission and make its recommendation to shareholders in due course. Biglari Holdings owns Steak ‘n Shake and Western Sizzlin’ chains.
Cracker Barrel said Lion Fund II L.P., an affiliate of Biglari Holdings, submitted nominations for Biglari and Philip Cooley, vice chairman of Biglari Holdings.
Cracker Barrel has made a number of unsuccessful attempts to repurchase buy back Biglari's stake. Most recently Biglari in February rejected the company's offer to buy out his stake for about $300 million, as Cracker Barrel aimed to avoid the expense and distraction of a third potential proxy battle.
At the time, Biglari wrote a letter, which was filed with the Securities and Exchange Commission to Cracker Barrel board chairman James Bradford Jr.
“The board ought to be preoccupied with optimizing long-term value on a per-share basis, not concerning itself with ‘monetizing’ our stake,” Biglari said in the letter. “By request, I insist that you spend less time on such ineffectual matters and more effort on creating shareholder value through operational improvement and secondarily instituting better capital allocation policies.”
Biglari, who owns a roughly 19-percent stake and has criticized Cracker Barrel's performance and pushed for changes in its leadership.
"We are disappointed that Mr. Biglari has rejected our good-faith offer," Sandra B. Cochran, Cracker Barrel’s CEO, said in response to Biglari’s letter in February. "We continue to believe it would be in the best interests of the company for Mr. Biglari to exit, avoiding the expense and distraction of a third-proxy fight and allowing us to move forward uninterrupted in the fulfillment of our business plans. We will continue to focus on delivering excellent results for customers and shareholders."
Cracker Barrel in June reported that its fiscal third-quarter earnings jumped 30 percent, topping expectations, amid strong sales and traffic.
Cracker Barrel shares are up 56 percent so far in 2013.
Cracker Barrel Old Country Store, Inc. was established in 1969 in Lebanon and operates 624 company-owned locations in 42 states.