Financing

Sardar Biglari takes a big stake in El Pollo Loco

The investor, whose Biglari Holdings owns Steak n Shake, has acquired 9.1% of the shares of the chicken chain in his latest “passive” investment.
Sardar Biglari El Pollo Loco
Is Sardar Biglari targeting El Pollo Loco? | Photo: Shutterstock.

Sardar Biglari is not done with the restaurant business.

The investor, whose Biglari Holdings owns Steak n Shake and remains a substantial investor in Cracker Barrel, has taken a 9.1% stake in the chicken chain El Pollo Loco, according to federal securities filings.

The stake is a “passive” investment, meaning Biglari has no plans at the moment to push management on the business. But such passive investments can be changed to activist investments if the investor so chooses at any point. And Biglari has a long track record of activism in the restaurant industry.

Biglari’s stake in El Pollo Loco is worth $34.1 million, based on the chain’s trading price on Tuesday.

This is the second, major passive investment in a California-based restaurant company that Biglari has taken this year.

The company in February acquired a 5.5% stake in Jack in the Box. That stake is worth about $94 million, according to securities filings.

Biglari also continues to control 2 million shares of Cracker Barrel. The investor had spent several years and fought several losing proxy fights against the family dining chain dating back to 2011 before calling a truce last year.

Exactly what this means for El Pollo Loco remains to be seen. The chicken chain operates nearly 500 locations and has system sales of more than $1 billion. But it has never quite lived up to investors’ expectations following its 2014 IPO. The company’s stock has largely languished in the low teens since 2014, after its price came down following an early surge brought about by odd comparisons to Chipotle.

El Pollo Loco’s stock is up 6% so far this year, underperforming other restaurant companies that have largely performed well on Wall Street thus far in 2023.

Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.

Multimedia

Exclusive Content

Financing

Red Lobster gives private equity another black eye

The Bottom Line: The role a giant sale-leaseback had in the bankruptcy filing of the seafood chain has drawn more criticism of the investment firms' financial engineering. The criticism is well-earned.

Financing

Beverage chains are taking off as consumers shift their drink preferences

The Bottom Line: Some of the fastest-growing chains in the U.S. push drinks, even as sales at traditional concepts lag in growing delivery and takeout business. How can traditional restaurants get in on the action?

Financing

Brands need to think creatively as the industry heads into a value war

The Bottom Line: Giving customers meal options they can afford will be key to generating traffic this year. But make sure those offers can generate a profit.

Trending

More from our partners