Cracker Barrel Old Country Store, Inc. ("Cracker Barrel" or the
"Company") (Nasdaq:CBRL) today announced that Institutional Shareholder
Services ("ISS"), Glass, Lewis & Co. ("Glass Lewis") and Egan-Jones
Proxy Services ("Egan-Jones") have unanimously recommended that Cracker
Barrel shareholders vote AGAINST the non-binding advisory proposals
publicly made by Biglari Capital Corp. and its affiliates (“Biglari
Capital”) requesting Cracker Barrel’s Board to (1) immediately pursue
all potential extraordinary transactions, including the sale of the
Company, and (2) take any action necessary to amend the Tennessee
Business Corporation Act to permit Biglari Capital to engage in an
extraordinary transaction with the Company. ISS, Glass Lewis and
Egan-Jones are leading proxy voting advisory services whose
recommendations are considered by major institutional investment firms,
mutual funds and other fiduciaries throughout the country.
In recommending shareholders vote AGAINST the non-binding advisory
proposals, all three advisory firms voiced their support for Cracker
Barrel’s current strategy and agreed that seeking an immediate sale of
the Company is not in the best interests of the Company's shareholders
in light of current market conditions and the Company's sustained strong
performance.
Commenting on the endorsement for the current strategy, Sandra B.
Cochran, Cracker Barrel's President and Chief Executive Officer, stated:
“We are extremely pleased that ISS, Glass Lewis and Egan-Jones continue
to support our current strategy and agree with our recommendation that
our shareholders vote AGAINST both of the proposals. We continue to
believe that execution of the current operational and strategic plan
remains the best means for creating long-term value for all of our
shareholders.”
Key excerpts from the ISS report:1
“The board appears to be acting as appropriate stewards of shareholder
value and shareholder capital.”
“The board has also been prudent in its use of cash, which is evidenced
in measures of return over the period, without being unwilling to return
excess capital to shareholders as the opportunities arose.”
“[T]he lack of any known overtures from other potential bidders, coupled
with the compelling share price performance under the current board and
management team, speaks volumes about the board's ability to extract
shareholder value from its own strategic plan.”
“Support for this proposal (Proposal 1, which called for the Board to
immediately pursue all potential extraordinary transactions, including
the sale of the Company), therefore, is not warranted given the firm's
relatively strong performance and because the board appears to be
exercising prudent stewardship of capital.”
“Shareholder support for this proposal (Proposal 2, which called for the
Board to take any action necessary to amend the Tennessee Business
Corporation Act to permit Biglari Capital to engage in an extraordinary
transaction with the Company) is therefore not warranted since it would
create an unreasonably broad mandate to change provisions of state law
which are outside of the board’s control.”
Key excerpts from the Glass Lewis report:
“Based on our review of the disclosed materials, we find no meaningful
footing for the Dissident's current solicitation. In the simplest terms,
the submitted resolutions are unnecessarily prescriptive, impractical
and counterproductive, in each case seeking to preempt the judgement of
a board that has consistently maintained -- indeed, expanded -- support
from Cracker Barrel's independent investor base every year since
implementation of the current strategic plan.”
“Perhaps more importantly, we believe there is considerable cause to
doubt the intentions of the Dissident, an entity which has continued to
submit very fluid arguments, flatly ignore resounding defeats and
harshly lament Cracker Barrel's performance and strategy despite the
fact that the Company has generated twice as much value for shareholders
as Biglari has been able to generate for its own investors.”
“Given the Company's unmatched success since September 2011,
management's stated willingness to openly engage with strategic parties
and the questionable nature of Biglari's arguments -- in both its
current and historical solicitation materials -- we believe shareholders
should reject these proposals. Accordingly, we recommend shareholders
vote AGAINST this proposal.”
Key excerpts from the Egan-Jones report:
“We believe that support for voting the management ballot is merited and
that voting the management ballot (WHITE PROXY CARD) AGAINST the two
proposals made by the dissidents is in the best interests of the Company
and its shareholders.”
“In light of current market conditions and the Company’s sustained
strong performance, we believe that the approval of the dissidents’
proposal is unnecessary and not in the best interests of Cracker Barrel
Old Country Store, Inc.”
About Cracker Barrel Old Country Store®
Cracker Barrel Old Country Store, Inc. provides a friendly
home-away-from-home in its old country stores and restaurants. Guests
are cared for like family while relaxing and enjoying real home-style
food and shopping that's surprisingly unique, genuinely fun and
reminiscent of America's country heritage…all at a fair price.
Cracker Barrel Old Country Store, Inc. (Nasdaq:CBRL) was established in
1969 in Lebanon, Tenn. and operates 626 company-owned locations in 42
states. For more information, visit crackerbarrel.com.
CBRL-F
Important Additional Information
Cracker Barrel, its directors and certain of its executive officers may
be deemed to be participants in the solicitation of proxies from Cracker
Barrel shareholders in connection with the matters to be considered at
the special meeting of Cracker Barrel's shareholders to be held on April
23, 2014. On March 21, 2014, Cracker Barrel filed a definitive proxy
statement (the "Proxy Statement") with the U.S. Securities and Exchange
Commission (the "SEC") in connection with the solicitation of proxies
from Cracker Barrel shareholders. INVESTORS AND SHAREHOLDERS ARE
STRONGLY ENCOURAGED TO READ THE PROXY STATEMENT AND ACCOMPANYING WHITE
PROXY CARD AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR
ENTIRETY WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT
INFORMATION. Shareholders may obtain the Proxy Statement, any amendments
or supplements to the Proxy Statement and other documents filed by
Cracker Barrel with the SEC for no charge at the SEC's website at www.sec.gov.
Copies are also available at no charge at the Investor Relations section
of our corporate website at www.crackerbarrel.com.
1 Permission to use quotes from the ISS report, the Glass
Lewis report and the Egan-Jones report was neither sought nor obtained.
Copyright Business Wire 2014