Cracker Barrel Old Country Store Inc.’s investors rejected naming the restaurant chain’s largest shareholder as a director for the second time.
They also voted in favor of a so-called poison pill with a 20 percent threshold that was adopted in April after Sardar Biglari continued to make open-market purchases of Cracker Barrel shares. Biglari, chairman and chief executive officer of San Antonio-based Biglari Holdings Inc., a chain-restaurant operator, owns about 17.5 percent of Cracker Barrel, according to his website.
Preliminary results show that more than 70 percent of voting shares were for the company’s board nominees, while more than 65 percent voted in support of Cracker Barrel’s shareholder rights plan, the Lebanon, Tennessee-based company said in a statement today.
Cracker Barrel, which has about 620 restaurants, has been fighting off attempts from Biglari to gain a seat on the dining chain’s board and push for management and strategy changes. Biglari’s bid for a board seat last year was rejected by shareholders. In September, Cracker Barrel said Biglari Holdings rejected its offer to appoint two independent directors.
Biglari faced an “uphill battle” given the stock’s improvement during the past year, Christopher Davis, who heads the investor activism group at Kleinberg, Kaplan, Wolff & Cohen PC, said in an interview. “Most activists would probably not choose this target for a third consecutive year.”
Cracker Barrel fell 0.1 percent to $61.86 at the close in New York. The shares have gained 23 percent this year.
Biglari has criticized the restaurant operator, saying that its performance has lagged competitors and it hasn’t reported enough financial details. He also has said Cracker Barrel should focus more on its existing stores instead of opening new ones.
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 Cracker Barrel statement from April.