Cracker Barrel Adopts A New 'poison Pill'

LEBANON, Tenn. (AP) ⿿ Cracker Barrel Old Country Store Inc. has adopted a new shareholder rights plan, or "poison pill," in an attempt to ward off investment firm Biglari Holdings Inc. or anyone else from acquiring control of the restaurant chain without offering a premium to all its shareholders.

Cracker Barrel said Biglari Holdings, which owns the Steak 'n Shake and Western Sizzlin restaurant chains, currently owns a stake of more than 16 percent in the company and obtained clearance in September to buy up to just under 50 percent of Cracker Barrel's stock.

"The shareholder rights plan is designed to assure that all of Cracker Barrel's shareholders receive fair and equal treatment in the event of any proposed takeover of the company and to guard against any attempt to gain control of Cracker Barrel without paying all shareholders a premium for that control," President and CEO Sandra Cochran said Tuesday in a statement.

San Antonio, Texas-based Biglari began buying Cracker Barrel shares in June 2011. In December, its chairman and CEO, Sardar Biglari, tried to join Cracker Barrel's board, but was defeated in an election at the annual shareholders meeting.

Biglari Holdings has complained that Cracker Barrel isn't living up to its potential. It also has said that the restaurant chain, which also operates retail stores that sell a variety of items including gifts and souvenirs, should provide more detailed disclosures about its individual business units and that the directors should invest more of their own money in the company.

Cracker Barrel said that it had adopted a shareholder rights plan with a 10 percent triggering threshold in September, but that it expired after shareholders voted against the plan at its 2011 annual meeting.

It said the new shareholder rights plan has a 20 percent triggering threshold and does not apply to all-cash, fully financed tender offers open for at least 60 business days.

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