Cracker Barrel Old Country Store Inc. said Tuesday it is scheduling a special shareholder meeting for April 23 to consider activist investor Sardar Biglari’s call for the family-dining chain to consider strategic alternatives, including a possible sale.
The Lebanon, Tenn.-based chain said it was calling the meeting after Biglari, chairman and chief executive of San Antonio-based Biglari Holdings Inc., sought shareholder support last week for the special meeting.
Biglari Holdings, which owns and franchises the Steak ‘n Shake and Western Sizzlin chains, and its affiliates own about 19.9 percent of Cracker Barrel’s shares. Only 20-percent shareholder approval is needed to call a special meeting.
Cracker Barrel said it was seeking to avoid added costs and a distraction for the company.
Biglari wants Cracker Barrel shareholders to consider his nonbinding proposal for the company to “pursue all potential extraordinary transactions,” including a sale. “We believe the board’s primary aim should be to sell to the highest bidder in order to maximize value for all shareholders,” he said in filings last week.
However, the company said in a statement on Tuesday, “It is hard to avoid the conclusion that Mr. Biglari is now just engaged in harassment of the company.”
Biglari has sought seats on Cracker Barrel’s board at each of the past three annual shareholder meetings, but he lost those bids. Shareholders at the most recent meeting in November also rejected Biglari’s proposal for a special $20-a-share dividend.
“This special meeting would impose the same kind of cost and distraction that the company sought to avoid when it voluntarily put Mr. Biglari's special dividend proposal on the annual meeting ballot,” the company said.
In December, Biglari called on Cracker Barrel to pursue strategic options, including a potential sale. He also said he was talking with investment bankers for a possible bid for the company, but that would require a change in Tennessee law, which prohibits such hostile takeovers.
For the Nov. 1-ended first quarter, Cracker Barrel posted a profit of $27.2 million, or $1.14 per share, up from $23.2 million, or 97 cents per share, in the same prior-year quarter. Revenue rose 3 percent to $649.1 million. Same-store sales at restaurants rose 2.8 percent in the quarter, and same-store sales from the retail section of the units increased 2.5 percent.
Cracker Barrel operates 625 restaurant-retail units in 42 states.