The war between Cracker Barrel and activist shareholder Sardar Biglari has erupted again after 18 months of peace.
Biglari issued a 29-slide presentation this morning to fellow Cracker Barrel investors because of what he characterized as an unprovoked attack on him last week by the family chain’s management. He contended that Cracker Barrel slammed him at the company’s Oct. 15 annual shareholder meeting to justify the adoption of a poison-pill provision in its charter, a protection he called costly and unnecessary.
The investor cited Cracker Barrel’s assertion that the poison pill is needed specifically to keep him from wresting control of the company, as he’s tried unsuccessfully to do in the past. But Biglari asserted that he’s not taken any action to strengthen his influence on the company or even spoken with management about Cracker Barrel’s direction for 18 months.
What’s more, Sardari said, a poison pill isn’t necessary. The securities laws of Tennessee, where Cracker Barrel is based, prohibits any stockholder who amasses more than 20 percent of shares outstanding to vote that interest as a block without the approval of a majority of fellow shareholders.
In addition, he said, he has a deal with JP Morgan that calls for him immediately to repay a $164 million load if his stake in Cracker Barrel hits 20 percent. A run on the company would not be economically be feasible.
Biglari spent 10 slides on the poison pill and what he took as the personal slights presented as justification for adopting it. The next 16 were devoted to his contention that his pressure on Cracker Barrel’s management has already enhanced the company’s value.
He ended with a slide that played off Cracker Barrel’s slogan of “East. Shop. Relax.” It reads, “Eat. Shop. Entrench.”
Underneath is the kicker line seemingly aimed at management: “Next exit.”
Cracker Barrel has yet to respond publicly to Sardari’s presentation.