Cracker Barrel Under Attack

Cracker Barrel Old Country Store is the latest company to experience an attempted hostile takeover. The attacker is Sardar Biglari, chief executive of Biglari Holdings. The company initiated its interest in Cracker Barrel in June when it acquired a 9.7% stake in the company. Despite the relatively large stake, Biglari Holdings did not provide a clear reason behind the acquisition at the time. Although such an action may not usually be considered suspicious, it is unusual when it involves Mr. Biglari. Biglari Holding’s primary subsidiary, Steak n’ Shake was acquired in a similar fashion: Mr. Biglari acquired a stake in the company, won an election to the board and eventually became chief executive. Similarly, after acquiring the stake in Cracker Barrel, Mr. Biglari attempted to wrangle a position on the Cracker Barrel board. However, he was not successful in this attempt and the Cracker Barrel board did not accept his nomination.

Nevertheless, Cracker Barrel is not alone in hostile takeovers; many other companies have faced a similar fate in the past, especially in recent times. What makes Cracker Barrel’s case more interesting is actually the way in which it has responded to the siege. Rather than overtly striking back at Mr. Biglari, Cracker Barrel has been both more soft and subtle in its defenses. For example, when declining Mr. Biglari’s nomination, it provided clear reasoning for the decision, demonstrating that it was not being decidedly uncooperative. The board argued that having a direct competitor such as Steak n’ Shake on its board could be both deleterious to the company and also possibly illegal according to the Sherman Antitrust Act.

To read more about this “public-relations-driven” strategy click on the following link:

By Meha Patel


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