San Antonio, TX
Dec. 12, 2011
/PRNewswire/ -- Biglari Holdings Inc. (NYSE: BH) encourages every shareholder of Cracker Barrel Old Country Store, Inc. (NASDAQ: CBRL), particularly institutional ones, to fully read the report of Glass Lewis & Co. Glass Lewis accurately depicted the issues facing shareholders. In our view, the reason the Board of Cracker Barrel does not agree with the report is because Glass Lewis relied on facts and public information not on ambiguous, nebulous, and faulty rhetoric.
As Glass Lewis said accurately, "Cracker Barrel's performance has been poor compared to peers over short, medium and long periods using a variety of metrics. Our concerns include stagnant sales, below-average earnings growth and declining customer traffic. The results unfortunately justify Cracker Barrel's persistent discounted market valuation. Combined, the shareholder return performance, operational performance and discounted valuation are severe enough, in our view, to warrant a board-level change."
Clearly, the most recent amendment to its poison pill discourages any shareholder from being both a significant owner and a 13D filer -- a marker of a board interested in protecting itself. Despite the Company's attempt to appear reasonable, once one reads the fine print, the intentions are quite transparent. Plainly, Glass Lewis has been seeing through the Board's actions. Glass Lewis cited "governance-related concerns. These include certain hallmarks of an entrenched board…."
Glass Lewis added, "Ultimately, despite the Company's concerns regarding Mr. Biglari….we believe [Mr. Biglari's] track record of increasing shareholder value and improving operation performance would benefit the Cracker Barrel board. We discount many of the board's concerns, which are perhaps typical of an entrenched board during a proxy fight."
"In sum, we believe performance, operational and governance problems exist at Cracker Barrel, which when combined, are severe enough to warrant a change at the Company. Despite the Company's recent positive changes, which were at least somewhat reactionary to [Biglari's] prodding, problems remain at the Company….[W]e believe Mr. Biglari still has much to contribute to the board that would potentially enhance value for all shareholders."