Cracker Barrel third win against Biglari substantial

Cracker Barrel Old Country Store Inc. shareholders sent a clear and direct message to Sardar Biglari on Tuesday: This isn’t just a run-of-the-mill operation.
Nov 13, 2013

Cracker Barrel Old Country Store Inc. shareholders sent a clear and direct message to Sardar Biglari on Tuesday: This isn’t just a run-of-the-mill operation. 

From its humble beginnings in 1969, Dan Evins created what has become a successful business model with the simple concept of “pleasing people.”

Since then, the Lebanon-based operation has grown from one store to 625 company-owned locations in 42 states and a 99-acre campus that remains at the roots of Evins first store. Cracker Barrel’s stock closed trading on the Nasdaq exchange at $111 per share, just off the 52-week high of $115. 

Cracker Barrel stock rose more than 65 percent in value so far in 2013. 

So there’s little doubt Cracker Barrel has turned the heads of investors lately, and that includes Sardar Biglari. 

The chief executive of Biglari Holdings, which owns Steak ‘N Shake and Western Sizzlin chains, owns about 20-percent of Cracker Barrel stock. He’s  the company’s largest single shareholder and has sought to gain a seat on Cracker Barrel’s board of directors. On Wednesday, shareholders told Biglari no for the third time in a row.

It was a message sent loud and clear. It appears, at least on the surface, Cracker Barrel’s executives and board of directors are making sound decisions for the future of the company. Things are headed in the right direction. There’s little, if anything, Biglari could do to help Cracker Barrel’s success.  

“We are encouraged by our shareholders’ continued strong support of our board of directors and believe that [Wednesday’s] vote reflects their recognition of our continued progress,” said Sandra Cochran, Cracker Barrel chief executive officer. “During the 2013 fiscal year, we exceeded key financial and operational objectives, increased our quarterly dividend and saw significant value creation.”

Biglari may be best served to turn his focus to Steak ‘N Shake, a company he took over in the similar fashion he’s trying currently with Cracker Barrel. 

In a recent report, the shareholder advisory firm Glass Lewis & Co. criticized Biglari’s management of Biglari Holdings, noting that his company “has failed to generate returns even marginally comparable to Cracker Barrel’s,” and that Biglari Holdings “does not currently pay dividends to its investors … has exhibited poor corporate governance practices and has more recently garnered a significant degree of opposition from its own investors.”

Maybe this begs the question as to why Biglari isn’t righting his own ship while out trying to buy a new one. 

To borrow a quote from Benjamin Franklin, “If you desire many things, many things will seem few.”

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