Biglari Holdings Inc. and related entities spent $4.6 million last week to buy more shares of Cracker Barrel Old Country Store Inc., giving the company command of 15.6 percent of Cracker Barrel’s shares.
Activist investor Sardar Biglari is chief executive of San Antonio, Texas-based Biglari Holdings, which is parent to the Steak ‘n Shake and Western Sizzlin restaurant chains.
Cracker Barrel is a Lebanon, Tenn.-based operator of 611 family restaurants.
In December, after a contentious proxy battle, Biglari failed to persuade Cracker Barrel shareholders to add him to the company’s board of directors, but was joined by a majority of those investors in a vote that directed management to eliminate a “shareholders’ rights” anti-takeover provision. The poison pill measure would have been triggered when an investor’s stake in Cracker Barrel hit 10 percent, and was rescinded at a time when Biglari-affiliated companies held approximately 9.9 percent of Cracker Barrel shares.
Documents filed with the Securities and Exchange Commission on March 7 show that Biglari Holdings purchased 36,200 shares of Cracker Barrel stock at $54.89 a share on March 5, and followed that up on March 6 with the purchase of an additional 47,656 shares at $54.83 a share.
In all, between Jan. 3 and March 6, Biglari Holdings has amassed 1.3 million shares of Cracker Barrel stock over 21 transactions.
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In 2011, Biglari Holdings and affiliate The Lion Fund LP purchased roughly 2.3 million shares during a six-month period ending Oct. 14.
Cracker Barrel shares closed at $54.94 a share on March 2, prior to Biglari Holdings’ latest stock purchases. Following the disclosure of the latest purchases by Biglari Holdings, Cracker Barrel stock closed at $55.01 a share on March 7, and climbed for the next two days, closing at $56.08 when the market closed for the weekend on March 9.
For the 52-weeks ended March 9, Cracker Barrel’s share price ranged from $37.31 to $59.90.
To date, companies Biglari controls have spent an aggregate $170.3 million to acquire 3.6 million shares in Cracker Barrel, an average of about $47.52 a share, Biglari told regulators on March 7.
If Biglari-controlled companies sold their Cracker Barrel stock today for the price it last traded at on March 9, they would receive an aggregate $201 million, before commissions or fees, representing an 18-percent return on investment.
Biglari has earned sizeable investment gains from the sale of stock in some public companies in which he bought shares to influence business practices to improve shareholder value, including Friendly Ice Cream Corp.
At other times, Biglari has sought control, such as at Steak ‘n Shake, where he gained the chairmanship and then the chief executive’s post in the summer of 2008, while controlling less than 14 percent of that company’s stock.
During the proxy fight, Biglari said that he wanted to help improve Cracker Barrel’s performance for shareholder benefit.
Biglari typically does not speak to the media, and has not updated since December the http://www.enhancecrackerbarrel.com website he created as a prelude to the proxy fight with Cracker Barrel management, or issued any press statements.
Editor's note: This story has been updated to reflect that the period ended March 9 was a 52-week period and that Biglari Holdings is based in San Antonio, Texas.