BH Annual Meeting

[gg]

I would like to start a thread on questions for people to ask at the BH annual meeting. I will not be able to make it, but I think there are people on this board that will be there. I imagine we can all benefit from brainstorming some good questions for those in attendance to ask.

 

PLEASE PLEASE PLEASE, do not make any subjective statements/comments on this thread. I would really like to keep this to brief replies, ideally from people who have a genuine interest in learning more about the company through good questions, as opposed to any commenting on the merits or demerits of BH's shares and management. If people that are going to the meeting could also potentially identify themselves, and let us know if they would be willing to ask some of the questions generated here, that could probably help incentivize others to think of good questions.

 

For starters, here's one:

 

QUESTION: I would like to know how Sardar thinks about BH's capital available to make private acquisitions. For a specific example, if Biglari had an opportunity to acquire a large private business, would BH ever sell CBRL stock (or other public holdings), send that cash back to the HoldCo to acquire a private company?

[giofranchi]

QUESTION: I would like to know how Sardar thinks about BH's capital available to make private acquisitions. For a specific example, if Biglari had an opportunity to acquire a large private business, would BH ever sell CBRL stock (or other public holdings), send that cash back to the HoldCo to acquire a private company?

 

Very good question! ;)

 

Here are mine:

 

1)      Why a picture of yourself in each store? What do you think it could accomplish?

 

2)      Managers we admire and respect a lot, like Warren Buffett, John Malone, Howard Marks, and Prem Watsa, practically work for their shareholders for free. Of course they all own a large percentage of their companies. As the percentage of BH you own increases over time, do you see your compensation and the incentive agreement coming down?

 

3)      Rights offering: it is the second year in a row you have decided to issue rights and raise new capital from shareholders. What are the reasons behind such a choice? And what are shareholders to expect in the future?

 

4)      Franchisees: in the 2014 AL you have written that in coming years domestic and international franchisees have already committed to opening a total of 239 units. Yet, recently we have heard some SNS franchisees complaining of too low, if not utterly non-existent, margins. Do you think this ill disposition of existing franchisees towards SNS might cause problems and ultimately decrease the number of new units that will be actually opened? If that happens, how are you going to deal with the matter?

 

Gio

[merkhet]

The name licensing agreement has the dual effect of providing a poison pill and enriching the CEO at the expense of the shareholders. Which one is more important to you, Mr. Biglari, and would you consider adopting a poison pill that does not impose such an onerous burden on shareholders?

[gg]

More questions:

1. Are there any noteworthy mistakes in strategy or implementation that biglari has made in the last year?

 

2. What would you say to shareholders who view the positions in AirT and insignia like they were bought entirely out of spite and revenge to Groveland, as opposed to their investment potential?

 

[innerscorecard]

1. What was your investment thesis for rapidly acquiring stakes of Air-T and Insignia for Biglari Capital Corp?

 

2. How do you view:

 

a. Book value;

b. Change in book value;

c. Any other pertinent metric;

 

as a rough proxy for shareholders to assess the intrinsic value of Biglari Holdings?