After a two-year truce, militant investor Sardar Biglari is mounting another attempt to take control of Cracker Barrel Old Country Store.
The operator of retro-themed family restaurants revealed Monday that Biglari is seeking five of the seats on Cracker Barrel’s 10-person board of directors. With a proxy already on the board as the result of an earlier effort to appease Biglari, the activist would wield a majority of votes.
Biglari included himself in the roster of proposed directors. An SEC filing from late last year indicates Biglari’s Lion Fund II and Biglari Holdings investment companies vote about 9.3% of Cracker Barrel’s common stock.
Those concerns already control two restaurant operations, the Steak ‘n Shake family-dining chain and multi-concept Western Sizzlin’, parent of its namesake brand as well as Quincy’s Family Steakhouse, Wood Grill Buffet and Great American Buffet.
The new attempt to set Cracker Barrel’s strategic direction marks Biglari’s sixth attempt in 13 years to take control of the family-dining chain’s board and the fourth time he’s proposed himself for a seat.
“Each time, our shareholders have rejected Biglari's nominees and positions by significant and increasing margins,” Cracker Barrel said in acknowledging that Biglari was mounting another attempt. Efforts to defeat him have cost the company millions of dollars.
“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,” the company said.
Biglari’s latest nomination of a director slate comes as Cracker Barrel is embarking on a comprehensive turnaround plan based on research conducted at the behest of Julie Masino, who assumed the job of CEO in November after a several-month orientation under her predecessor, Sandy Cochran, who’d held the job for about 12 years. The findings indicated that Cracker Barrel is badly in need of a rejuvenation, particularly of its restaurants’ design and menus. That reinvigoration effort is a few months underway.
Biglari had been sharply critical of Cochran and her leadership of the chain.
During Cochran’s tenure, Cracker Barrel acquired a secondary family-dining concept, Maple Street Biscuit Co., a regional entrant in the booming breakfast-and-lunch market.
A peace accord between Biglari and Cracker Barrel had been announced in September 2022. Under that agreement, one of Biglari’s anointed proxies was added to Cracker Barrel’s board, and the investor was compensated $500,000 to allay the cost of past attempts to win seats.
The director granted a seat at Biglari’s instigation was Jody Bilney, a former EVP and chief brand officer of Outback Steakhouse parent Bloomin’ Brands. According to Cracker Barrel, Bilney has voiced full support for Masino’s turnaround plan.
Bilney also serves on the board of Chuy’s Holdings, which is being acquired by Olive Garden parent Darden Restaurants.
Biglari, an avid student of investment guru Warren Buffett, also holds investments in a number of other operations, including the grilled-chicken chain El Pollo Loco.
Revenues for Steak ‘n Shake and Western Sizzlin’ were $64.5 million for the second quarter, or essentially flat from the prior year.
Their parent company, Biglari Holdings, posted a net loss for the quarter of $48.2 million, compared with a profit of $1.9 million the prior year.
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