INDIANAPOLIS Western Sizzlin chairman Sardar Biglari, head of The Lion Fund, which holds a 5.8-percent stake in 490-unit Steak n Shake, is seeking a seat for himself and an associate on the chain’s board of directors, according to a securities filing. All eight board seats will be up for re-election at next February’s shareholder meeting.
In a letter delivered last week to Indianapolis-based Steak n Shake, The Lion Fund said that Biglari and Philip L. Cooley, an adviser to the fund, want directorships. Biglari, who recently sought similar election to the board of Friendly Ice Cream, has been an activist shareholder at other restaurant chains.
His request follows the abrupt resignation from Steak n Shake last week of Peter Dunn, who had been its president, chief executive and a director for the past five years. Chairman Alan Gilman now is interim president and CEO.
Dunn’s departure from Steak n Shake, which has experienced soft same-store sales for the past two years, followed the company’s downbeat report of a $124,000 net profit for the third quarter ended July 4, compared with a profit of $7.3 million for the prior third quarter. In the latest quarter, Steak n Shake took a charge of $3.3 million for the planned closing of 14 of the chain’s nearly 477 corporate and franchised restaurants. Revenue grew 2.1 percent to $153.6 million while same-store sales fell 4.3 percent.
In June, another investor group that includes Dallas-based hedge fund HBK Investments LP, Lone Star Steakhouse & Saloon parent Lone Star Funds and individual investor Robert J. Stetson disclosed that it had acquired a 9.5-percent steak in the family-dining chain.
Biglari, while chairing the Roanoke, Va.-based Western Sizzlin family steakhouse chain, has taken activist investment positions in such companies as Applebee’s International Inc. In June he said he planned to vote against IHOP Corp.’s pending acquisition of Applebee’s, claiming that IHOP’s $25.50-per-share bid was too low.