Steak ‘n Shake restaurant owner has accumulated about 11.3% of Mexican concept’s shares
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El Pollo Loco Holdings Inc.’s board has adopted a limited-duration shareholder rights plan, or poison pill, to protect shareholders’ interests amid share purchases by Sardar Biglari and his affiliates, the company said Wednesday.
The Costa Mesa, Calif.-based quick-service Mexican restaurant chain said the rights plan is effective immediately and will expire on Aug. 7, 2024.
Biglari, whose San Antonio, Texas-based Lion Fund had earlier made activist-investor pushes at Lebanon, Tenn.-based Cracker Barrel Old Country Store Inc. and San Diego, Calif.-based Jack in the Box Inc., filed Securities and Exchange Commission documents in July that stated he and his companies had accumulated 9.1% of shares in El Pollo Loco and increased that to 11.3% of shares in Aug. 8 filings.
Biglari Holdings owns the Steak ‘n Shake and Western Sizzlin brands.
El Pollo Loco, in a statement, said “the limited-duration rights plan was adopted in response to the rapid and significant accumulation of El Pollo Loco stock by Biglari Capital Corp. (together with its affiliates, ‘Biglari Capital’).”
“In adopting the rights plan, the board noted that Biglari Capital has a track record of acquiring substantial and sometimes controlling interests in public restaurant companies,” the company said in a statement.
William Floyd, El Pollo Loco’s board chairman, said: “The adoption of this rights plan is intended to ensure that shareholders are able to realize the full potential of their investment in the company and to prevent any third party from obtaining control of El Pollo Loco in a manner and at a price that are not in the best interests of the Company’s shareholders.”
The rights plan is triggered if any one entity acquires 12.5% or more of the company’s outstanding common stock.
El Pollo Loco is being assisted by Spotlight Advisors LLC, which is serving as strategic adviser, and Kirkland & Ellis LLP, which is acting as legal adviser.
El Pollo Loco has more than 490 company-owned and franchised restaurants in Arizona, California, Colorado, Louisiana, Nevada, Texas and Utah.
Contact Ron Ruggless at [email protected]
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