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Cracker Barrel Adopts Poison Pill as Defense to Biglari T

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April 10 (Bloomberg) -- Cracker Barrel Old Country Store Inc. will seek shareholder approval of a poison pill with a 20 percent threshold after Biglari Holdings Inc. won regulatory clearance to buy as much as 49.99 percent of the stock.

A poison pill is a method used to discourage a takeover bid by making a company less attractive to a potential raider. While the measure would give shareholders rights to buy more stock at half its value, the privilege would be void for investors making a bid not endorsed by the board, according to a statement today by Cracker Barrel, operator of more than 600 stores in 42 states.

The rights plan is designed to ensure that investors receive fair treatment during a takeover or attempt to gain control of the company, Lebanon, Tennessee-based Cracker Barrel said in the statement. The plan, adopted yesterday by the board, will terminate unless approved by shareholders at the annual meeting, according to the statement.

Last year, Cracker Barrel owners rejected a shareholder rights plan with a 10 percent threshold.

Sardar Biglari, chief executive officer of Biglari, said in a December statement that Cracker Barrel was “in need of a turnaround.” He has also criticized the company for not reporting enough financial detail.

Steak ‘n Shake

Biglari increased its ownership to 16.9 percent, according to a filing with the Securities and Exchange Commission today. It last reported a 15.5 percent stake in the company on March 30.

Today, Sardar Biglari declined to comment, through his assistant, on Cracker Barrel.

Cracker Barrel fell 1.1 percent to $54.80 at the close in New York. The shares have gained 15 percent in the past 12 months.

Biglari, based in San Antonio, has operations including the Steak ‘n Shake and Western Sizzlin restaurant chains. Cracker Barrel said Biglari, in September, received clearance under the Hart-Scott-Rodino Act to acquire as much as 49.99 percent of the shares.

To contact the reporter on this story: Leslie Patton in Chicago at

To contact the editor responsible for this story: Robin Ajello at

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