Family-dining restaurant company responds to longtime investor’s impending proxy fight
Cracker Barrel Old Country Store Inc. said Monday it was “disappointed” that shareholder Sardar Biglari intended to nominate five candidates to stand for election to the restaurant company’s 10 director positions.
The Lebanon, Tenn.-based family-dining brand “confirmed that The Lion Fund II, L.P., an affiliate of Biglari Holdings Inc., both of which are controlled by Sardar Biglari, has announced its intent to nominate five candidates to stand for election to the company's board of directors at the company's 2024 annual meeting of shareholders.”
Cracker Barrel said the effort “marks the sixth time Biglari has nominated candidates for board seats, the fourth time nominating himself, and the seventh proxy contest overall that Biglari has launched in the last 13 years.”
Biglari owns more than 9% of Cracker Barrel’s outstanding shares. He also serves as CEO of the Steak ‘n Shake and Western Sizzlin’ brands.
The company noted that its other shareholders had rejected Biglari's nominees in the past.
However, in a 2022 truce between Biglari and Cracker Barrel, Jody Bilney was named to the board as a Biglari-supported nominee. Bilney currently serves as a director at the company.
“The Cracker Barrel board is composed of 10 highly qualified directors, nine of whom are independent, and six of whom have been appointed in the last four years,” the company said in a press release Monday.
In May, Cracker Barrel unveiled a strategic plan to help address struggling sales and traffic.
The brand’s current strategic plan, the company said, “is being led by our newly appointed CEO, Julie Masino, and has the full support of all of our independent directors, including the director whom the board appointed as part of a 2022 settlement agreement with Biglari.”
Cracker Barrel in 2019 added the fast-casual Maple Street Biscuit Co. to its portfolio in a deal valued at $36 million.
“Although Cracker Barrel is disappointed that Biglari has chosen to launch another distracting and costly proxy contest, the company's nominating and corporate governance committee will thoughtfully consider Biglari's nominations in keeping with its practices of good governance,” the company said. “The board will present its formal recommendations to shareholders in due course.”
For the third quarter ended April 26, Cracker swung to a loss of $9.2 million, or 41 cents a share, down from net income of $14 million, or 63 cents per share, in the prior-year period. Revenues in the quarter were down 1.9% to $827.1 million. Same-store restaurant sales fell 1.5%, and same-store retail sales were down 3.8%.
Cracker Barrel, founded in 1969, has about 660 company-owned restaurants in 44 states in addition to the Maple Street Biscuit Co.
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