complaining that Biglari has a conflict of interest because he owns a competing chain.
Biglari, 34, from San Antonio, Texas, irritates many in the industry because he is seen as aggressive in his takeover efforts. He has been an active shareholder at Cracker Barrel and has tried to force changes at the rustic-themed restaurants to the irritation of the current board.
Jerrell Shelton, a shareholder who voted against Biglari, described him as “audacious and opportunistic.”
The future of the Southern restaurant company with headquarters in Tennessee hung in the balance as shareholders cast their votes to decide whether Biglari would get a board seat and exert more influence.
The Tenneseean of Nashville said stock analysts had weighed in before the vote, in many cases encouraging shareholders to rebuff Biglari’s bid for more control, saying it could hurt Cracker Barrel’s stock price and derail progress being made to boost restaurant sales.
Four days before the Cracker Barrel annual meeting, analysts at SunTrust Robinson Humphrey had called on stockholders to block Biglari’s election to the board, saying it would lead to senior management turnover and put pressure on Cracker Barrel’s stock.
The brokerage firm also argued that Biglari has a stake in a competing restaurant chain, Steak n Shake, and that amounts to a conflict of interest since Cracker Barrel is arguably a direct competitor.
The 34-year-old Biglari has built a national reputation on reversing the course of burger chain Steak ’n Shake. He gets credit in many circles for streamlining that restaurant’s operations.
Biglari’s company, Biglari Holdings, has had Cracker Barrel in its financial sights for months and has called for operational changes.
Biglari also owns Western Sizzlin restaurants and controls more Cracker Barrel shares than any other investor, just under 10 percent.
Independent shareholder adviser Glass, Lewis & Co put its weight behind Biglari’s board campaign, saying Biglari could shore up what it called Cracker Barrel’s historically weak performance.
But Cracker Barrel executives argued that while the company had stumbled as the economy tumbled into recession, it has since rebounded. They also professed worries that Biglari would eventually orchestrate a merger of Cracker Barrel and Steak ‘n Shake without paying a premium.
Cracker Barrel has 600 locations in 42 states. All are owned centrally; it is not franchise operation. Cracker Barrel calls itself a “country store” with both restaurant service and an accompanying shop.
According to an online biography, Sardar Biglari was born in Iran August 30, 1977, eighteen months before the overthrow of the monarchy. His father was a military officer and his mother a friend of the royal family. After the revolution his father was imprisoned and both Sardar and his mother were described as being under house arrest.
It was five years later, in 1984, that the family escaped Iran after reportedly bribing prison guards to let the father go. The family settled in San Antonio. Sardar was seven years old when he arrived.
In Iran, Biglari’s family had a history in the carpet business and the family opened an Oriental rug store in San Antonio.