December 31, 2013
Biglari Holdings urges selling of Cracker Barrel''s company
Cracker Barell stood firmly by its business strategy, fending off a request from activist investor Sardar Biglari to initiate a sale of the country store and restaurantcompany.
Biglari, chairman and CEO of holding company Biglari Holdings Biglari Holdings, sent a harshly-worded letter of intent to Cracker Barrel chairman James Bradford on Christmas Eve requesting that Cracker Barrel put itself for sale and give its shareholders the ability to decide the future of the company. Citing his nearly-20% stake in the company, Biglari wrote:
Biglari also lambasted Cracker Barrel''s handling of its Duck Dynasty merchandise- which saw the company pull some Duck Dynasty items from its shelves after Phil Robertson''s anti-gay remarks, only to reinstate the products 24 hours later- calling the incident an example of the Cracker Barrel''s board poor judgment.
In response to Biglari''s demands, Cracker Barrel said that its existing business strategy is "currently the proper course of action for the long-term best interests of the company and its shareholders."
Bradford commented on the decision and said they are disappointed that Biglari is seeking to call a special meeting to vote on a proposal requesting that the company commence a sale process, particularly in light of his defeat by substantial margins in three consecutive proxy contests, referring to Biglari''s repeated and failed attempts to join the Cracker Barrel board. He added that the board "regularly evaluates all options to serve the best interests of the company and its shareholders and will continue to do so."
Bradford did not address the Duck Dynasty bait-and-switch in his statement; in reinstating the sale of the products.
Following Cracker Barrel''s affirmation of its business strategy, shares of the company were down about 1.3% in early-afternoon trading. Year-to-date, the stock is up 71.2%. Meanwhile, shares of Biglari Holdings were down 0.97% in midday trading Monday (Dec 23) afternoon; year-to-date, it has seen 40.5% growth.