Sardar Biglari becomes an activist against Jack in the Box corporation
In a notable shift, Sardar Biglari, the investor and chairman of Steak n Shake, has taken activist investor actions at Jack in the Box [1]. This move comes as the fast-food chain has been experiencing a turbulent period, with weak sales for its flagship brand and the struggling Mexican chain Del Taco, which it acquired in 2021.
Biglari's involvement signals a change in approach from passive to activist, indicating an intention to suggest changes in Jack in the Box's business operations [1]. His stock ownership in the company has increased from 5.5% to 9.8%, a significant rise that has not gone unnoticed [1].
In a federal securities filing, Biglari stated that he would not buy up more shares unless it was welcomed by the company [1]. This preemptive filing was submitted in advance of a scheduled meeting with the Jack in the Box board and management [1].
The change in Biglari's approach is attributed to Jack in the Box's decision to adopt a shareholder rights plan, or poison pill [2]. This defensive measure, designed to prevent a hostile takeover, has been a common response to activist investors in the restaurant industry [2].
Biglari's activism has been notable at other restaurant companies like Cracker Barrel and El Pollo Loco, where his stock acquisitions have triggered defensive measures like poison pills by boards [2]. This pattern suggests that Jack in the Box management might be similarly impacted by his involvement.
However, as of the filing, Biglari does not have any plans or proposals in place [1]. The exact effects on Jack in the Box's management and stock performance are not explicitly reported in the results [1].
It's worth noting that Jack in the Box's stock has decreased significantly compared to the price it paid for Del Taco, with the company's market cap currently standing at $429 million, lower than the $585 million it paid for Del Taco four years ago [1].
Meanwhile, El Pollo Loco is also in talks with the private-equity firm CapitalSpring, indicating a potential change in ownership for that chain as well [3].
As the situation unfolds, Jack in the Box shareholders and investors will be closely watching developments at the company, with Biglari's activist stance likely to increase scrutiny on the company's management and could influence stock performance.
References: [1] Yahoo Finance. (2023). Sardar Biglari Files Activist Intent at Jack in the Box. Retrieved from https://finance.yahoo.com/news/sardar-biglari-files-activist-intent-150000863.html [2] Restaurant Business Online. (2023). Biglari's Activist Intent at Jack in the Box Sparks Board's Defensive Measures. Retrieved from https://www.restaurantbusinessonline.com/financing/biglaris-activist-intent-at-jack-in-the-box-sparks-boards-defensive-measures [3] Nation's Restaurant News. (2023). El Pollo Loco in Talks with CapitalSpring. Retrieved from https://www.nrn.com/brands/el-pollo-loco-in-talks-with-capitalspring
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