Dave's Dispatch 
Recent Posts
- Tell me: What would it take for you to leave?
- Why Eva Longoria loves fast food
- Bonuses for diversity hiring
- The end for two, sort of
- BUCA: "A sad day for a vibrant concept"
- Big idea: street food
- Gone fishin'
- Restaurant dining, summer-style
- Making Servers Pay: Cold-Hearted or cost-effective?
- Business-as-UNusual
Recent Comments
- Dave on Tell me: What would it take for you to leave?
- Jim Coromel on Tell me: What would it take for you to leave?
- Steve on Bonuses for diversity hiring
- PAUL PAZ on Making Servers Pay: Cold-Hearted or cost-effective?
- Frequent Diner on BUCA: "A sad day for a vibrant concept"
Most Commented On
- Micatrotto: 'LIke a very large restaurant.' (27)
- McDonald's "gay support" issue (21)
- Making Servers Pay: Cold-Hearted or cost-effective? (16)
- Same old, same old integrity (10)
- Max & Erma's, Part 2 (6)
Archives
- August 2008
- July 2008
- June 2008
- May 2008
- April 2008
- March 2008
- February 2008
- January 2008
- December 2007
- November 2007
- October 2007
- September 2007
- August 2007
- July 2007
- June 2007
- May 2007
- April 2007
- March 2007
- February 2007
- January 2007
- December 2006
- November 2006
- October 2006
- September 2006
- August 2006
- July 2006
- June 2006
- May 2006
- April 2006
- January 2006
Blog
Link This | Email this | Blog This | Comments (0)
Steak'n Shake offers seat to Biglari
At a loss: Can Steak 'n Shake
placate an activist shareholder?
Management at the Shake'n Steak Co. (SNS) has been rattled recently by activist shareholder Sardar Biglari, who runs a hedge fund in San Antonio and controls about 8 percent of the company's stock. Yesterday's 8-K amending the company's bylaws suggests they are feeling rather uncomfortable about suggestions, to put it politely, he made in a recent letter.
Biglari is claiming company officials, whom he wants to oust, have destroyed millions of dollars worth of shareholder capital by opening company-owned restaurants with poor returns. Not surprisingly, he is demanding seats on the board for him and partner Philip L. Cooley.
The company's reaction is predictable. They agreed to the board seats but with conditions, one is to respond by February 4 to the conditions. Management also noted amendments to the company's bylaws. Here's one change that caught my eye (and I bet, Biglari's):
Section 3. Special Meetings. Special meetings of the shareholders for any purpose or purposes, unless otherwise prescribed by statute or by the Articles of Incorporation, may be called by the Board of Directors or the Chairman and shall be called by the Chairman or the Secretary at the request in writing of a majority of the Board of Directors, or at the request in writing of shareholders of record holding not less than eighty percent (80%) of all the shares outstanding and entitled by the Articles of Incorporation to vote on the business for which the meeting is being called.
In short, it appears that management doesn't want "special meetings" called (at least easily) that might require them to account for the disastrous results of the company's most recent quarter.
Meanwhile, Biglari has hinted he'll launch a proxy fight and has paid for billboards telling shareholders in the Midwest to vote him and Cooley to the board.
Biglari is no stranger to restaurants. He's chairman of Western Sizzlin' and, before it sold, owned at least 15 percent of the outstanding shares of Friendly Ice Cream Corp.
Google his name and you'll disover he's something of a darling among financial bloggers, who regard him with a mixture of awe and respect. In June Stokblogs.com ran the headline "Sardar Bilagi -- A New Letter!" The epistle in question is to shareholders of Western Sizzlin and was penned in 2006.
Biglari is an expert letter writer. His specialty is the long form, mincing no words as he cites, in jargon-fee prose, the sins of current management in excruciating detail and that which he must do to correct the mistakes.
The latest letter, to Steak 'n Shake, is a classic of the genre.
Steak'n Shake offers seat to Biglari
February 1, 2008
At a loss: Can Steak 'n Shake
placate an activist shareholder?
Management at the Shake'n Steak Co. (SNS) has been rattled recently by activist shareholder Sardar Biglari, who runs a hedge fund in San Antonio and controls about 8 percent of the company's stock. Yesterday's 8-K amending the company's bylaws suggests they are feeling rather uncomfortable about suggestions, to put it politely, he made in a recent letter.
Biglari is claiming company officials, whom he wants to oust, have destroyed millions of dollars worth of shareholder capital by opening company-owned restaurants with poor returns. Not surprisingly, he is demanding seats on the board for him and partner Philip L. Cooley.
The company's reaction is predictable. They agreed to the board seats but with conditions, one is to respond by February 4 to the conditions. Management also noted amendments to the company's bylaws. Here's one change that caught my eye (and I bet, Biglari's):
Section 3. Special Meetings. Special meetings of the shareholders for any purpose or purposes, unless otherwise prescribed by statute or by the Articles of Incorporation, may be called by the Board of Directors or the Chairman and shall be called by the Chairman or the Secretary at the request in writing of a majority of the Board of Directors, or at the request in writing of shareholders of record holding not less than eighty percent (80%) of all the shares outstanding and entitled by the Articles of Incorporation to vote on the business for which the meeting is being called.
In short, it appears that management doesn't want "special meetings" called (at least easily) that might require them to account for the disastrous results of the company's most recent quarter.
Meanwhile, Biglari has hinted he'll launch a proxy fight and has paid for billboards telling shareholders in the Midwest to vote him and Cooley to the board.
Biglari is no stranger to restaurants. He's chairman of Western Sizzlin' and, before it sold, owned at least 15 percent of the outstanding shares of Friendly Ice Cream Corp.
Google his name and you'll disover he's something of a darling among financial bloggers, who regard him with a mixture of awe and respect. In June Stokblogs.com ran the headline "Sardar Bilagi -- A New Letter!" The epistle in question is to shareholders of Western Sizzlin and was penned in 2006.
Biglari is an expert letter writer. His specialty is the long form, mincing no words as he cites, in jargon-fee prose, the sins of current management in excruciating detail and that which he must do to correct the mistakes.
The latest letter, to Steak 'n Shake, is a classic of the genre.
Posted by David Farkas on February 1, 2008 | Comments (0)
Advertisement
Advertisements
