Cracker Barrel Old Country Store Inc.’s shareholders again voted to elect all of the corporate-sponsored nominees to its board of directors, blocking activist investor Sardar Biglari and Biglari Holdings vice chairman Phil Cooley from gaining board seats.
Biglari’s San Antonio, Texas-based company, Biglari Holdings Inc., owns 17 percent of Cracker Barrel's outstanding shares. This was Biglari’s second attempt to secure a position on the Lebanon, Tenn.-based restaurant company’s board. In 2011, Biglari’s effort to gain a director position was similarly rejected by shareholders.
"We are gratified by our shareholders support, which was even stronger than last year,” said Cracker Barrel president and chief executive Sandra B. Cochran in a statement Thursday. “We believe that today's vote reflects our shareholders' recognition of the tremendous progress we have made, as we have exceeded our key financial and operational objectives, added seven new directors in the last 18 months, and seen a significant appreciation in the value of our shares since initiating new strategic priorities in September of last year.”
This shareholder vote is the latest element of a long battle between Biglari and Cracker Barrel. In April, Biglari called for the removal of four of Cracker Barrel’s 11 board members, including its executive chairman Michael Woodhouse. During the same month, Cracker Barrel had adopted a new shareholder rights plan, or poison pill, in order to keep Biglari from taking over the company by buying additional shares without a share dilution plan.
Biglari attempted to nominate himself and Cooley to Cracker Barrel’s board in September. Cracker Barrel offered Biglari the opportunity to nominate two independent directors instead, but Biglari declined, stating, “We believe this board has made an offer that is not serious; rather, it is an obvious attempt to posture and mislead shareholders.”
On Oct. 31, Biglari Holdings released a statement saying it believed Cracker Barrel had been “artificially inflating financial results” in its filings with the Securities and Exchange Commission. In that statement, Biglari said that shareholders should reconsider the current board management.
Cracker Barrel declined to comment beyond its previous available press releases. Calls to Biglari were not returned by press time.
Cracker Barrel operates 621 company-owned namesake restaurants. Biglari Holdings is the parent company of Western Sizzlin and Steak ‘n Shake.