ISS, Glass Lewis and Egan-Jones Endorse All Cracker Barrel Nominees to Board; Reject Attempt by Biglari to Secure Two Board Seats
Recommend Vote Against Proposed Special Dividend
Recommend Shareholders Vote WHITE Proxy Card
In endorsing the Cracker Barrel nominees all three advisory firms
recommended that shareholders reject Biglari Holdings' nomination of
Commenting on the endorsements,
Key excerpts from the ISS report:1
"The evidence of the past seven quarters seems to suggest that the company's investment in its brand, its changes to its menu options, and the changes to its retail merchandise have in fact borne out, and that the growth in revenue over the past two years is the result of a well-managed go-to-market strategy, not a short-sighted pricing action taken at the expense of sustainable growth in customer traffic."
"The company's continued communication about its strategic plan, demonstrable progress on its specific initiatives, and performance on key metrics over the tenure of the current board and management team strongly suggests the attentive stewardship of shareholder value."
"The board has also clearly, consistently, and continually communicated its strategy to shareholders and has outlined many of the steps it has taken to ensure shareholder capital is being deployed prudently."
"Given the strong operating and financial performance under the reconstituted board, which have delivered shareholder returns significantly stronger than either its index or the median of direct peers, and the evidence the board continues to make prudent capital allocation decisions including the return of cash to shareholders, the dissidents have not made a compelling case that board change is necessary."
"A vote AGAINST [the special dividend] proposal is warranted because the dissidents have not offered a compelling argument that the board is making poor capital allocation decisions; the proposal would increase the company's financial leverage to nearly twice the peer median, increasing financial risk but reducing strategic flexibility; and the board has already demonstrated its willingness, particularly through the significant increase in the regular dividend over the past two years, to return capital to shareholders."
Key excerpts from the Glass Lewis report:
In discussing this year's proxy contest compared to the previous two, Glass Lewis said:
"We find the Dissident's current solicitation, marked by arguments more perfunctory and semantic than piercing and seismic, is perhaps the least compelling of the trio of solicitations for Board representation."
"We find the Dissident is seeking investor support against a decidedly challenging backdrop: Biglari has failed to generate returns even marginally comparable to Cracker Barrel's peer-leading performance despite a large stake in the Company, does not currently pay dividends to its investors, has twice been decisively rejected by the Company's shareholders, has exhibited poor corporate governance practices and has more recently garnered a significant degree of opposition from its own investors."
"We believe investors should reasonably consider the dubious corporate governance principles promulgated by Biglari when considering the prospective appeal of electing either of Messrs. Biglari or Cooley."1
"Based on the foregoing factors, we continue to believe there is little benefit to be realized through the removal of any incumbent nominees or the election of any Dissident candidates.
Key excerpt from the Egan-Jones report:
"1. We believe that it would be imprudent of the Company at this time to pay the special dividend advocated by the Dissidents, thereby substantially increasing leverage and reducing the Company's financial flexibility to invest appropriately in its business in the future as market conditions may change.
2. We are not convinced that the election of the Dissidents' slate to the board of directors would work to the benefit of all shareholders.
3. We believe that the Dissidents have failed to make a persuasive case that their joining the board would work to maximize the value of shareholder value."
About
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
Cracker Barrel's 2013 Annual Meeting. On
1 Permission to use quotes from the ISS report, the Glass Lewis report and the Egan-Jones report was neither sought nor obtained.
1 The Glass Lewis report issued
CBRL-F
Investors:
or
Media:
Source:
News Provided by Acquire Media