Cracker Barrel Rejects Sardar Biglari's Demand To Commence Sale Process

(RTTNews) - Cracker Barrel Old Country Store, Inc. (CBRL) has Monday rejected a demand from its largest shareholder and activist investor Sardar Biglari to commence a sale process for the company. The company's board has determined that the continued execution of current business strategy is the best course of action for the long-term best interests of the company and its shareholders.

"We are disappointed that Mr. Biglari is seeking to call a special meeting to vote on a proposal requesting that the Company commence a sale process, particularly in light of his defeat by substantial margins in three consecutive proxy contests," Chairman James Bradford said in a statement.

Biglari had said in a letter last week that selling the company should be the board's primary aim, and that he was willing to submit a bid for the company to initiate the sale process. He also revealed that he was working with a bank on securing financing for the proposed deal.

The Lebanon, Tennessee-based company operates the Cracker Barrel Old Country Store restaurant and retail concept.

Attempts by Biglari to seek Board seats in each of the last two years were rejected by the company's shareholders by significant margins. Biglari had earlier asked the company to consider strategic options, including a potential sale.

In November, Cracker Barrel's shareholders elected all the company's nominees to the board of directors, rejecting both Biglari and Phil Cooley as directors. Biglari and Cooley were nominated by The Lion Fund II, L.P., an affiliate of Biglari Holdings Inc.

Shareholders also rejected a non-binding, advisory proposal on a $20 per share special dividend that was publicly proposed by affiliates of Biglari Holdings. Biglari is an activist investor and the company's largest shareholder with a near 20 percent stake.

"Cracker Barrel's Board of Directors continues to believe that the execution of management's existing business strategy will create the most value for all shareholders. The Board regularly evaluates all options to serve the best interests of the Company and its shareholders and will continue to do so," Bradford added.

In Monday's regular trading session, CBRL is currently trading at $110.21, down $1.05 or 0.94% on a volume of 23,244 shares.