Three times Sandar Biglari has tried to get on Cracker Barrel’s (CBRL) board, and three times he’s been rebuffed. Now, he’s trying to buy the company.
The Tennessean has the details on Biglari’s latest maneuver for Cracker Barrel:
In the letter dated Dec. 24, Biglari continued to push for a sale of the restaurant company, saying he is willing to buy it himself. However, under Tennessee law, Biglari — who owns nearly 20 percent of the company's shares — is prohibited from making a bid.
"As you are well aware, Tennessee law currently restricts our ability to engage in such a transaction," the letter said. "Thus, we request that the Board support our efforts to seek an amendment to the state law that would give all shareholders the ability to decide the future of their Company."
To help drive home the point, he questioned the chain's handling of the controversy over "Duck Dynasty."
Biglari continues to argue that current management is not creating enough value for shareholders.
Miller Tabak’s Stephen Anderson calls Biglari’s pursuit of Cracker Barrel “quixotic.” He writes:
It is not unheard of for a smaller company in the restaurant space to acquire a larger peer, as evidenced by IHOP’s purchase of the much larger Applebee’s in 2007; the combined entity became DineEquity (DIN), and the deal was financed by a mix of debt (which [DineEquity] still is paying off) and proceeds from the sale of company-owned Applebee’s to franchisees. However, we view BH’s cash flow generation as not sufficient to cover any potential [Cracker Barrel] acquisition, and think Board members will scoff at the idea of selling off highly profitable company-owned sites to franchisees.
Top Beverage Stocks To Own Right Now
Shares of Cracker Barrel have gained 0.9% to $113.29 and Biglari Holdings (BH), Sandar Biglari’s holding company, has fallen 0.4% to $516.96, on a day when DineEquity has advanced 1% to $85.03, Red Robin Gourmet Burgers (RRGB) has risen 0.5% to $76.64 and Denny’s (DENN) is up 0.7% at $7.45.
No comments:
Post a Comment