San Antonio Investor Pursues Cracker Barrel Board Seats Amid Controversy
San Antonio is buzzing with news about Sardar Biglari, an activist investor and the brain behind Biglari Holdings Inc. This is the same company that runs Steak n Shake. The spotlight is on Biglari as he battles for a seat on the board of the beloved old-school restaurant chain Cracker Barrel Old Country Store Inc. But don’t let the friendly name fool you; things are getting pretty heated!
The Challenge Unfolds
Biglari isn’t just asking for one spot; he wants three! However, he’s hit a snag since two top shareholder advisory firms, Institutional Shareholder Services (ISS) and Glass Lewis, have advised Cracker Barrel shareholders to withhold their votes from him. According to Biglari, Cracker Barrel is in a full-blown “crisis,” and he’s been trying to shake up its management since 2011, which marks this as his seventh proxy fight.
The stakes are high, especially since Biglari currently owns a 9.3% stake in Cracker Barrel. He’s been quite vocal about his concerns, criticizing the restaurant chain for opening new locations while existing ones see fewer customers. He’s also been pretty upset over Cracker Barrel’s financial decisions, like investing in Holler & Dash Biscuit House and Punch Bowl Social.
Opposition and Support
While things look a bit grim for Biglari in the eyes of advisory firms, it’s not all doom and gloom. One of his nominees, Michael Goodwin, a former bigwig at PetSmart, has received backing from Glass Lewis and also from Cracker Barrel itself. Additionally, another nominee of his, Milena Alberti-Perez, a former CFO for Getty Images, is also getting support from Glass Lewis, even though Cracker Barrel prefers not to see her served on the board.
A Clash of Visions
What has Biglari all worked up? Well, it seems he vehemently opposes Cracker Barrel’s grand plan of pumping around $600 million to $700 million into remodeling its restaurants. Biglari isn’t convinced that new furniture and decor will transform the company’s fortunes. “The problem lies not in the seating but in getting more people to sit in it,” he wrote. That’s a bold statement!
Cracker Barrel isn’t just sitting quietly either. They argue that their recommended board nominees are the way forward, claiming these individuals will help the company thrive now and into the future. The chain acknowledges it needs to evolve while assuring shareholders that they’re actively working on refreshing the board and enhancing performance.
What Lies Ahead?
The upcoming shareholder meeting is where all the drama will unfold. Scheduled for November 21, this is the day when votes will be cast and the future direction of Cracker Barrel will be determined. Biglari is particularly keen on replacing the two longest-serving members of the board, Carl Berquist and Meg Crofton. ISS and Glass Lewis have suggested shareholders think twice before voting for them. It’s a high-stakes showdown!
Calls for Change
As the controversy continues, it’s clear that Biglari’s push for change is strong, but he’s facing significant resistance. Both ISS and Glass Lewis stress that while Biglari has “made a case for change,” his own company’s governance raises eyebrows. This makes for a classic tale of a passionate shareholder challenging the status quo, but the big question remains: will he succeed this time around?
As the plot thickens, all eyes remain on the San Antonio investor and what might transpire next at Cracker Barrel’s board meeting. Will Biglari score a win or will he be left wondering what went wrong once again? Only time will tell!
