Cracker Barrel Old Country Store Inc. rebuffed activist investor Sardar Biglari’s Dec. 24 filings that again called for the company to consider strategic alternatives, including a possible sale.

The Lebanon, Tenn.-based family-dining and retail chain said in a statement made on Monday that its board had considered Biglari’s call for a possible sale and “determined that the continued execution of the company’s existing business strategy is currently the proper course of action for the long-term best interests of the company and its shareholders.”

Biglari Capital and its chief executive, who through various entities own more than 19.9 percent of Cracker Barrel’s shares, said in a letter filed last Tuesday with securities regulators that they would consider a bid for Cracker Barrel. Earlier in the month, Biglari had urged Cracker Barrel to consider strategic options, including a sale.

Biglari, whose San Antonio, Texas-based investment firm also owns and franchises the Steak ‘n Shake and Western Sizzlin’ restaurants, said that Cracker Barrel’s “assets would be far more productive under our leadership than in the hands of present leadership.” He also said he would be willing to lead a bidding process for Cracker Barrel if Tennessee law didn’t restrict such a transaction from a shareholder and asked the company’s help in changing the state law.

Although Biglari’s letter gave no specifics, he said his investment firm was in talks with an investment bank to finance a possible deal.

On Monday, James W. Bradford, Cracker Barrel’s chairman, said in statement: “We are disappointed that Mr. Biglari is seeking to call a special meeting to vote on a proposal requesting that the company commence a sale process, particularly in light of his defeat by substantial margins in three consecutive proxy contests.”

Cracker Barrel shareholders in three consecutive annual meetings have rejected Biglari’s proxy fights for board seats and, in the most recent November vote, also turned down his call for a special meeting to consider a $20-per-share dividend.

Bradford said the board continued to support management’s strategy. “The board regularly evaluates all options to serve the best interests of the company and its shareholders and will continue to do so,” he said in a statement.

A spokeswoman said Monday that the company would have no further immediate comment.

In the first quarter ended Nov. 1, Cracker Barrel reported a 17.1-percent increase in profit compared with the previous year. The company said year-over-year traffic fell 0.1 percent, but the average check rose 2.9 percent. 

Cracker Barrel has units in 42 states.

Contact Ron Ruggless at ronald.ruggless@penton.com.
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