This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Food Fight: Biglari Makes Another Run at Cracker Barrel

On Sunday night, it took Boston Red Sox pitcher Ryan Dempster four tries to bean controversial New York Yankee slugger Alex Rodriguez. In this case, the fourth time was the charm.

Two days earlier, Biglari Holdings (BH) CEO Sardar Biglari commenced his third bid to gain seats on country restaurant chain Cracker Barrel's (CBRL) board of directors. In this case, Biglari is hoping that the third time will be the charm. He's got an uphill fight; plunking A-Rod was much easier.

Biglari Holdings has not so quietly built a 19.9% stake in Cracker Barrel over the past couple of years. Biglari can't increase it position beyond 20% due to a poison pill adopted by Cracker Barrel. It's not clear what change Sardar Biglari, and additional Biglari Holdings nominee Phil Cooley could effect by being added to Cracker Barrel's board.

Sardar Biglari has been very vocal in his criticism of Cracker Barrel, saying the company spends too much on billboard advertising, doesn't offer its' customers good value for the money, hasn't been transparent enough in its financial disclosures, and has failed to allocate its capital well.

Cracker Barrel has offered to buy back Biglari Holding's stake, which Biglari declined.

Getting elected to Cracker Barrel's board of directors won't be easy, as Biglari has been defeated twice before.

Shareholders may be unlikely to vote for Biglari and Cooley for one simple reason; stock performance. Cracker Barrel shares -- which have risen 60% year to date and more than 160% over the past two years -- have recently breached the $100 mark, an all-time high. Perhaps they are worth much more. Biglari, who turned around fast-food chain Steak n Shake, which is owned by Biglari Holdings, has some ideas on how to extract even greater value, but that may be a difficult argument to make to satisfied shareholders. CBRL Chart CBRL data by YCharts

Biglari's abrasive nature has done little to enamor him with Cracker Barrel shareholders, either. If he somehow is elected, I'd like to be a fly on the wall at those board meetings. It would be a clash of cultures at the very least.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AAPL $110.37 -1.75%
FB $88.15 -1.94%
GOOG $606.25 -1.32%
TSLA $245.57 -0.86%
YHOO $32.54 2.42%

Markets

Chart of I:DJI
DOW 16,374.76 +23.38 0.14%
S&P 500 1,951.13 +2.27 0.12%
NASDAQ 4,733.4970 -16.4820 -0.35%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs