Biglari objects to Steak n Shake bylaw changeBiglari objects to Steak n Shake bylaw change

INDIANAPOLIS Dissident Steak n Shake shareholder Sardar Biglari said Monday he would accept the offer of two board seats for himself and a colleague only if the company drops a bylaw change that limits shareholder powers.

Steak n Shake extended the offer of two board seats to Biglari and his Lion Fund LP colleague Philip Cooley on Jan. 31, the same day the company changed its bylaws to require a special stockholders’ meeting only if holders of 80 percent of shares outstanding request one. Previously, only 25 percent of shares was required to request a special shareholders' meeting.

Biglari, whose Lion Fund holds an 8.5-percent stake in Steak n Shake, wrote in a letter Monday to the company that the change in bylaws "eliminates a fundamental shareholder right to call a special meeting."

"This revision provides the board immunity, not accountability, and reveals a culture to which we cannot subscribe," Biglari wrote in the letter.

Biglari has pressured the operator or franchisor of nearly 500 restaurants for representation on the board and has called for management changes, including the replacement of Alan Gilman, chairman and interim CEO of Steak n Shake, and director James Williamson Jr., former president and CEO of Consolidated Products Inc., as the parent of Steak n Shake was formerly known.

Biglari, who is also chairman of Western Sizzlin' Corp., has similarly pressed as a shareholder for management changes at such restaurant companies as Friendly Ice Cream and Applebee’s.

Steak n Shake's said its annual meeting, at which all directors will be voted upon, will be held in early March in Indianapolis, where the company is based.

In its first quarter ended Dec. 19, Steak n Shake reported a net loss of $1.2 million, or 4 cents per share, and a same-store sales drop of 9.5 percent. The company’s shares fell 27 cents, or 2.9 percent, to $8.94 in Monday afternoon trading.