Cracker Barrel Old Country Store Inc. said Tuesday its shareholders voted to elect all corporate-sponsored board members at its annual meeting, blocking activist investor Sardar Biglari’s attempt to gain a seat through a proxy fight.
Lebanon, Tenn.-based Cracker Barrel, which operates 608 family restaurants, said preliminary results provided by the company’s proxy solicitor indicate the board members placed for nomination by the company won “by a significant margin.” Final results will need to be certified.
While Biglari lost his battle to become a Cracker Barrel director, he is free to increase his stake in the family-dining operator, as Cracker Barrel’s proposed shareholders’ rights plan was rejected. Biglari, chief executive of Biglari Holdings Inc., parent to Steak n Shake and Western Sizzlin, is the largest shareholder in Cracker Barrel, with a nearly 10-percent stake.
The shareholders’ rights plan was created in September by Cracker Barrel, and was set up to block investors from garnering more than a 10-percent stake in the company without allowing shareholders an opportunity to buy more stock at a reduced price. Cracker Barrel had described the plan as “intended to protect [shareholders] from abusive takeover tactics that would not treat all shareholders fairly.”
Biglari had said the measure would only help entrench current management and “would have a negative effect on share price” by putting up barriers that limit demand and by diluting the stock.
If the annual meeting’s preliminary results hold, the rights plan will cease to be in effect after results are certified.
After the conclusion of Cracker Barrel’s annual shareholder meeting, chief executive and president Sandra B. Cochran issued a statement reiterating management’s position throughout the months-long exchange of charges and counter charges with Biglari. She did not specifically mention the challenger or his bid for a board seat.
“Over the past several weeks, we have talked with many shareholders about our new leadership, our new initiatives, and our growing momentum,” Cochran said. “Our reconstituted board and new management team are united in their resolve to continue driving operational changes that are positively impacting our financial performance and enhancing shareholder value.
“I also look forward to continuing a dialogue with all investors in the months to come, as we recognize the importance of maintaining an open line of communication with our shareholders,” she added.
Biglari had issued no statements about the announcement of preliminary shareholder voting results with securities regulators or at his www.enhancecrackerbarrel.com website as of press time. A spokesman for the executive in his headquarters office said that in keeping with a long-standing policy, he had no comments for reporters.
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