Cracker Barrel's top shareholder may make bid

Friday, December 20, 2013, Vol. 37, No. 51
The Associated Press

Cracker Barrel's largest shareholder says he is considering a bid for the restaurant chain as part of his efforts to change the company.

Sardar Biglari, through his investment firm Biglari Holdings, owns nearly 20 percent of Cracker Barrel Old Country Store Inc.'s shares. He has tried and failed multiple times to win a seat on the board. Shareholders also recently rejected his proposal for a $20-per-share special dividend.

Biglari said in a letter Tuesday that the company's earnings power is "far too low" under current management and urged Cracker Barrel to consider selling itself. He said he could lead the process by submitting a bid and was talking with an investment bank about funding, but gave no further specifics. He said he would need to change Tennessee state law in order to make a successful bid for the company.

Alternatively, he suggested that the company repurchase its shares. Buying back stock can help support a company's earnings per share.

Lebanon-based Cracker Barrel did not immediately respond to a request for comment.

Biglari said he would consider selling his entire stake in Cracker Barrel because of the company's decisions. The investor pointed to Cracker Barrel's recent handling of the Duck Dynasty controversy as an example of management's poor judgment.

Cracker Barrel pulled Duck Dynasty items from its shelves after a member of the popular show told a magazine reporter that gays are sinners and African-Americans were happy under Jim Crow laws. The company on Sunday said that it had offended customers by pulling the merchandise and was putting the items back in its stores.

Cracker Barrel shares increased $2.05, or 1.9 percent, to $112.44 in midday trading. Stock of Biglari Holdings Inc., which also runs the Steak n Shake and Western Sizzlin restaurant chains, added $8.91, or 1. 7 percent, to $519.97.