Cracker Barrel Makes Faux 'Offer' to Biglari Holdings
Biglari Holdings (NYSE: BH) today learned that Cracker Barrel's (NASDAQ: CBRL) new board members have decided to use old board tactics. We believe this Board has made an offer that is not serious; rather, it is an obvious attempt to posture and mislead shareholders. We had higher hopes for this Board: We were expecting it to be reasonable rather than mere window dressing hoping to appear reasonable. The ersatz offer has two fundamental flaws, demanding that we nominate two persons to the Board of Directors who have
1) No relevant restaurant experience 2) No significant ownership in Cracker Barrel's stock
In our view, an offer with such defeatist, detrimental conditions is not a real offer. We ask "what good does it do shareholders for us to find strangers without restaurant experience and then attempt to place them on the Board?"
Plainly, the Board's proposal is diametrically opposed to our ideas as well as to the research showing that companies with the presence of large shareholders outperform companies that have no such owners overseeing management. Over two centuries ago Adam Smith in The Wealth of Nations made the following observation regarding agents of companies: "The