[video] Cracker Barrel Investor Calls for Sale
Written by: Jeffrey Kanige
Tickers in this article: CBRL CMG DRI MCD YUM
NEW YORK (The Deal) -- Sardar Biglari has been fighting for change at Cracker Barrel for years while Darden Restaurants puts Red Lobster up for sale.
He may not be winning, but he sure is persistent. Hello and welcome to The Deal Report, I'm Jeff Kanige.
Sardar Biglari is not happy with Cracker Barrel's
Biglari is the company's largest shareholder. But it's not clear why he thinks his fellow investors will be any more receptive to his ideas this time around. Maybe he was inspired by Barington Capital's success in its campaign against Darden Restaurants
The Darden example, though, doesn't help Biglari's case. For one thing, Demitri's sources point out that restaurant chains tend to do better when they focus on one or two brands. Take McDonald's
But Cracker Barrel just runs Cracker Barrels and has actually been doing a pretty good job. The stock is up almost 70% this year and the company now has a market cap of about $2.5 billion. So any acquisition would be an expensive proposition. In face, industry experts tell Demitri that they don't think anyone would pay the price for Cracker Barrel even if the company agreed to put itself on the block.
Biglari says he'll take his case directly to Cracker Barrel's shareholders if the board won't act. But with the stock price rising so strongly and with sales and profits growing, investors don't really have a compelling reason to listen.
In New York, this is Jeff Kanige for The Deal.
Written by Jeff Kanige in New York.