Sardar Biglari bought more Jack in the Box stock, so Jack in the Box swallowed a poison pill.
The San Diego-based fast-food company, which also owns Del Taco, on Wednesday adopted a shareholder rights plan after Biglari Capital Corp. amassed additional shares of stock. The investor now holds 9.9% of Jack in the Box stock, up from the 5.5% stake he’d taken in 2023.
Jack in the Box said the plan is designed to ensure shareholders “receive fair and equal treatment in the event of any proposed takeover of the company and to guard against tactics to gain control of the company without paying stockholders an appropriate premium for that control.”
“Jack in the Box’s board is committed to protecting our stockholders and remains confident in management’s ability to execute the company’s ‘Jack on Track’ plan to improve long-term financial performance across its restaurant system, strengthen its balance sheet and transition to an asset-light business model,” David Goebel, chairman of Jack in the Box’s board, said in a statement.
Biglari is the chairman of Biglari Holdings, the owner of Steak n Shake and Western Sizzlin, among other things. The investor has been eyeing other restaurant investments, having taken the Jack in the Box stake. It has also made an offer to buy the chicken chain El Pollo Loco.
That chain has enlisted CapitalSpring to potentially facilitate a different deal.
But Jack in the Box is coming off a difficult stretch. Same-store sales at both its flagship chain and Del Taco have struggled. Former CEO Darin Harris left the company earlier this year and was replaced by CFO Lance Tucker—who had only been brought back to the chain weeks earlier.
The company is now selling Del Taco and is reconfiguring its corporate strategy. Its stock declined 58% in the first half of the year.
The company has a market cap of $360 million, or $200 million less than what it paid for Del Taco in 2021.
The shareholder rights plan would be triggered when a shareholder or group acquires 12.5% or more of the company’s shares. If that happens, shareholders other than the acquiring group can buy stock at a 50% discount.
Biglari acquired Jack in the Box shares more than two years ago but filed as a passive investment. He has not filed any documents with the SEC as of yet on the latest purchase.
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