Cracker Barrel Old Country Store Inc. said Thursday it had offered to 17-percent stakeholder Sardar Biglari the opportunity to nominate two independent directors to the family-dining company's board after he had attempted to nominate himself, but he refused the opportunity.
This is the second time Biglari has attempted to gain a board position at Lebanon, Tenn.-based Cracker Barrel, which operates 620 namesake restaurants. Last year his efforts to seek a director position was rejected by shareholders. Earlier this year he called for the removal of four Cracker Barrel directors. In a statement Thursday, Biglari said Cracker Barrel's latest offer was "not serious."
Cracker Barrel said it was "disappointed that Mr. Biglari has once again refused to consider a reasonable settlement offer.” The company continued to say it had "offered Mr. Biglari the opportunity to appoint two independent directors of his choice to the Board last year as well, an offer which Mr. Biglari also refused.”
Biglari criticized Cracker Barrel’s board for its decision. “We believe this Board has made an offer that is not serious; rather, it is an obvious attempt to posture and mislead shareholders,” he said in a statement.
He added that Cracker Barrel's decision was not made in the best interest of shareholders, because it would force him to select two nominees to the board who had neither restaurant experience nor significant ownership of Cracker Barrel.
Julie Davis, a spokeswoman for Cracker Barrel, said the company had no further comment. Biglari did not respond to a request for additional comments.
Biglari owns his Cracker Barrel stake through Biglari Holdings, which is also is the parent of Steak 'n Shake and Western Sizzlin.
In explaining its decision, Cracker Barrel said potential conflicts of interest that might arise because of Biglari’s role at Steak ‘n Shake and other “legal issues.” Cracker Barrel said Biglari was given until Sept. 21 to select his nominees. Cracker Barrel's annual shareholder meeting will be held Nov. 15.
Cracker Barrel also outlined the type of board member it hoped Biglari would nominate: “The nominees would need to be unaffiliated with Biglari Holdings, not be executive officers or directors of any other restaurant company that competes with Cracker Barrel, and otherwise comply with Cracker Barrel’s stated qualification criteria for directors.”
At the Nov. 2011 annual meeting, Cracker Barrel shareholders turned down an appeal Biglari made to be elected to the company’s board of directors by a vote of 64 percent to 36 percent.
An earlier version of this story was corrected to clarify Cracker Barrel's position and its dealings with Biglari.This version also corrects the number of directors Biglari had sought to remove earlier this year.