Cracker Barrel Old Country Store Inc Rejects Investor Sale Proposal
LEBANON, TN
Last week, Cracker Barrel’s largest shareholder, Biglari Capital Corp., suggested that the restaurant and retail chain should pursue a sale and that he was willing to bid, citing unsatisfactory returns for stockholders. Since then, the restaurant and retail chain has rejected his bid, issuing a statement saying that the company believes its current business plan is best for the company and its shareholders, according to The Wall Street Journal.
“We are disappointed that Mr. 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,” said James W. Bradford, Cracker Barrel Chairman.
In a letter to Bradford, Biglari, who owns nearly 20% stake in the company, wrote, “We believe Cracker Barrel’s assets would be far more productive under our leadership than in the hands of present leadership. Thus, we are willing to purchase the business because we perceive a significant upside under our management. But other sophisticated buyers also should have the opportunity to bid for the company.” However, Tennessee law would prohibit Biglari’s firm from buying the company.
This isn’t the first time the investor has tried to gain representation on the company’s board. His recent nonbinding proposal for a $20 special dividend from the company was also rejected.
