If Sardar Biglari wants to control Cracker Barrel Old Country Store Inc., he’ll first have to get past the Southern-style restaurant chain’s new "poison pill" defense.
Board members of the Tennessee-based company approved a shareholder rights plan to try to obstruct investor Biglari's hostile takeover efforts.
The strategy would prevent Biglari, who recently raised his stake in Cracker Barrel to more than 16%, from accumulating 20% without offering shareholders a premium. To do so would water down the value of his shares.
"The shareholder rights plan is designed to assure that all of Cracker Barrel's shareholders receive fair and equal treatment in the event of any proposed takeover of the Company and to guard against any attempt to gain control of Cracker Barrel without paying all shareholders a premium for that control," Chief Executive Sandra B. Cochran said in a statement.
The plan will expire in 2015 unless shareholders reject it at the company's next annual meeting, in which case it would expire immediately. They previously voted against a Cracker Barrel plan to staunch Biglari's holdings at 10% but also struck down his campaign to join the company's board.
Biglari’s Texas-based holding company has also waged (and won) proxy battles against the Steak ‘n Shake and
The restaurant chain has 612 locations in 42 states.