shalab Posted October 13, 2012 Share Posted October 13, 2012 Looks like he is going to issue new shares, from the Oct 5th proxy: The Board has unanimously approved and recommends to the shareholders the adoption of an amendment to Article V of our Amended and Restated Articles of Incorporation (the “Amendment”). The Amendment would (a) increase the total number of shares of all classes of stock that we are authorized to issue from the current 12,500,000 shares to 60,000,000, (b) redesignate the existing Common Stock as Class A Common Stock and reduce the authorized number of shares of the redesignated Class A Common Stock from 2,500,000 to 2,000,000, and © approve the issuance of 48,000,000 shares of a new Class B Common Stock, each share of which would have economic rights equivalent to one-fifth (1/5th) of a share of Class A Common Stock, and would have one-one-hundredth (1/100th) of the vote of a share of Class A Common Stock. Link to comment Share on other sites More sharing options...
giofranchi Posted October 13, 2012 Share Posted October 13, 2012 Looks like he is going to issue new shares, from the Oct 5th proxy: The Board has unanimously approved and recommends to the shareholders the adoption of an amendment to Article V of our Amended and Restated Articles of Incorporation (the “Amendment”). The Amendment would (a) increase the total number of shares of all classes of stock that we are authorized to issue from the current 12,500,000 shares to 60,000,000, (b) redesignate the existing Common Stock as Class A Common Stock and reduce the authorized number of shares of the redesignated Class A Common Stock from 2,500,000 to 2,000,000, and © approve the issuance of 48,000,000 shares of a new Class B Common Stock, each share of which would have economic rights equivalent to one-fifth (1/5th) of a share of Class A Common Stock, and would have one-one-hundredth (1/100th) of the vote of a share of Class A Common Stock. For the purpose of creating an initial, timely supply of Class B shares, we currently intend to issue the Class B shares through a pro rata dividend on the Class A shares at a rate of ten (10) Class B shares for each Class A share outstanding. Shareholders should note that the proposed issuance of Class B shares in the form of a stock dividend will not mean that a shareholder of the Company will be diluted, nor will his or her voting power be minimized. Page 3 of PROXY STATEMENT FOR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON NOVEMBER 2, 2012 I have read all your objections, and they are well thought and expressed, still I just don’t see the difference between what Mr. Biglari is doing and, for instance, what Mr. Loeb is doing at Third Point and what Mr. Ackman is doing at Pershing Square. Or what Mr. Ichan has done for the last 40 years. Is Mr. Loeb an activist? Yes. Does Mr. Loeb operate on a value basis? Yes. Is he willing to bet big on a single idea? Well, to be an activist investor you are compelled to do so (YHOO). Is Mr. Loeb friendly and fair? Hardly… Ask Yahoo’s management (actually, ex-management!). Is Mr. Loeb very well remunerated? Yes. Has Mr. Loeb achieved great results since inception in 1996? Of course. Exactly the same could be said regarding Mr. Ackman. And what about Mr. Ichan? Though I cannot claim to have studied Mr. Ichan’s career in depth, I am sure he is one of the greatest american investors, he has always pushed for changes within companies that were destroying value, and, because of that, he has never been associated with the word ‘friendly’. Furthermore, Ichan Enterprises is very much concentrated in just a handful of big ideas (9). So, just one more question, if you please, then I won’t bother you anymore! I promise! ;D Do this board generally thinks poorly about activists? Thank you, giofranchi Link to comment Share on other sites More sharing options...
bookie71 Posted October 13, 2012 Share Posted October 13, 2012 Give me your money and I will give you a token vote (1/100) that doesn't count. Link to comment Share on other sites More sharing options...
Parsad Posted October 13, 2012 Share Posted October 13, 2012 Looks like he is going to issue new shares, from the Oct 5th proxy: The Board has unanimously approved and recommends to the shareholders the adoption of an amendment to Article V of our Amended and Restated Articles of Incorporation (the “Amendment”). The Amendment would (a) increase the total number of shares of all classes of stock that we are authorized to issue from the current 12,500,000 shares to 60,000,000, (b) redesignate the existing Common Stock as Class A Common Stock and reduce the authorized number of shares of the redesignated Class A Common Stock from 2,500,000 to 2,000,000, and © approve the issuance of 48,000,000 shares of a new Class B Common Stock, each share of which would have economic rights equivalent to one-fifth (1/5th) of a share of Class A Common Stock, and would have one-one-hundredth (1/100th) of the vote of a share of Class A Common Stock. Pphhhtttt! LOL! Looks like he is going to issue new shares, from the Oct 5th proxy: The Board has unanimously approved and recommends to the shareholders the adoption of an amendment to Article V of our Amended and Restated Articles of Incorporation (the Amendment). The Amendment would (a) increase the total number of shares of all classes of stock that we are authorized to issue from the current 12,500,000 shares to 60,000,000, (b) redesignate the existing Common Stock as Class A Common Stock and reduce the authorized number of shares of the redesignated Class A Common Stock from 2,500,000 to 2,000,000, and © approve the issuance of 48,000,000 shares of a new Class B Common Stock, each share of which would have economic rights equivalent to one-fifth (1/5th) of a share of Class A Common Stock, and would have one-one-hundredth (1/100th) of the vote of a share of Class A Common Stock. For the purpose of creating an initial, timely supply of Class B shares, we currently intend to issue the Class B shares through a pro rata dividend on the Class A shares at a rate of ten (10) Class B shares for each Class A share outstanding. Shareholders should note that the proposed issuance of Class B shares in the form of a stock dividend will not mean that a shareholder of the Company will be diluted, nor will his or her voting power be minimized. Page 3 of PROXY STATEMENT FOR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON NOVEMBER 2, 2012 I have read all your objections, and they are well thought and expressed, still I just dont see the difference between what Mr. Biglari is doing and, for instance, what Mr. Loeb is doing at Third Point and what Mr. Ackman is doing at Pershing Square. Or what Mr. Ichan has done for the last 40 years. Is Mr. Loeb an activist? Yes. Does Mr. Loeb operate on a value basis? Yes. Is he willing to bet big on a single idea? Well, to be an activist investor you are compelled to do so (YHOO). Is Mr. Loeb friendly and fair? Hardly Ask Yahoos management (actually, ex-management!). Is Mr. Loeb very well remunerated? Yes. Has Mr. Loeb achieved great results since inception in 1996? Of course. Exactly the same could be said regarding Mr. Ackman. And what about Mr. Ichan? Though I cannot claim to have studied Mr. Ichans career in depth, I am sure he is one of the greatest american investors, he has always pushed for changes within companies that were destroying value, and, because of that, he has never been associated with the word friendly. Furthermore, Ichan Enterprises is very much concentrated in just a handful of big ideas (9). So, just one more question, if you please, then I wont bother you anymore! I promise! ;D Do this board generally thinks poorly about activists? Thank you, giofranchi Giofranchi, if you are comfortable with the three examples you've mentioned, then Biglari Holdings should be no different. Other than Ackman, I do not trust Loeb, and Icahn has the type of reputation that Sardar is aiming for and I do not prefer. If your only goal is to make money, then that is perfectly fine...most people have the same interests...heck at the right price I would buy BH if I knew it was tremendously undervalued. Unfortunately, how someone treats their partners is also important...make sure you go into that investment with your eyes open and understand the risks in terms of being shareholder friendly. Cheers! Link to comment Share on other sites More sharing options...
link01 Posted October 13, 2012 Share Posted October 13, 2012 The question is would you invest in biglari holdings if he didnt write exhaustive letters and preach value investing? If you take that out and look at the actions and valuation is this a business you would want to be partners in? Any small business or large business owner knows marketing and innovation are the two drivers of business growth. Biglari is a MASTER marketer. He has marketed himself as the second coming via the website presentation, long letters, and reverse stock split. This was all premediated hes an absolute genius using buffets cult status to trigger trust. Absolutely brillant marketing tactic. The proof is that buffet is a great businessman able to attract groups together to achieve a common goal. Biglari is a bully activist that forces his way on boards and enforces his will. He will never attract enough partners to grow a mini berkshire cause his repupation is ruined. You need goodwill and trust to grow a business. He has no goodwill and us living in the information age his actions will not be forgotten. He is alone with his minion cooley and logical busineessman will not partner with him period. For him to be successful he has to use all his energy to bully companies to give in. This might work for awhile but omg his isnt a sustainable business plan. you hit the nail on the head, premfan! as talented, passionate, & driven as he might be how can he ever hope to truly 'partner' with anyone who knows the value of trust & honest dealings? biglari's whole persona & style is the antithesis of that. its combative & divisive. the very definition of egotisitical. he sees only pawns, not partnetrs despite his rhetoric & parroting of WEB & others like him. if he wants to be successful then he will have to drop his pretences & mock-berkshire aspirations & aim lower, literally & metaphorically: he should look to investors like icahn & loeb at 3rd point for his models. they are cut from the same cloth. and whatever it is of the stuff that makes for good & trusted partners that those guys lack he can perhaps like them make up for it with a callous indifference for how he achieves his goals, including greemail & the big, bad bully-pulpit at large. Link to comment Share on other sites More sharing options...
Kiltacular Posted October 13, 2012 Share Posted October 13, 2012 People like this, in my experience and in my read of history, always, always, ALWAYS find a way to screw you -- and that's IF things work out well. That is, even if things work out, you won't get much benefit. There are a hundred way to imagine this scenario. The management literally has a virtually unlimited number of ways to screw the "outside, passive, minority shareholder" when a compensation scheme like the one he has set up is in place. How many other NYSE listed companies have such a compensation set-up? Just put yourself in his shoes and imagine you want to get as rich as possible and ask yourself what you could do using the compensation scheme to make that happen? Moreover, in many cases, for reasons mentioned by others in this thread, things often don't work out well. In this case, you're also screwed. I wouldn't hesitate to move on. Link to comment Share on other sites More sharing options...
biaggio Posted October 13, 2012 Share Posted October 13, 2012 Agree with all above. Life is too short to do business with folks you don t like. It is not worth it no matter how much money you think you may make. Especially when there are other viable options. Its especially not prudent if you can t trust them as you most certainly will be screwed if they are energetic and able. My 2 cents, paraphrasing wiser men then me. Link to comment Share on other sites More sharing options...
giofranchi Posted October 14, 2012 Share Posted October 14, 2012 I particularly enjoyed shalab’s answer! But I have read all your answers and they have provided a lot of food for thought. Thank you very much! Parsad, please, do not really believe my only goal is to make money! You are all great investors and great people, and I would really loathe to give you an impression of me that is so wrong! Call me naïve, but I believe there is at least some truth in the following well-known quote by Mr. Icahn: "I'm like the gunfighter you hire to save the town. That gunfighter is there to do good...but he'll only do what he does if he knows he'll get paid for it." Carl Icahn Let me explain: paraphrasing Mr. Winston Churchill, private enterprise really is the strong horse that pulls the whole cart. And for private enterprise to do its job, wealth must be created. If a business does not create wealth for too long a time, whether it be Yhaoo! (Loeb), or Canadian Pacifics (Ackman), or Chesapeake (Icahn), or Cracker Barrel (Biglari), as far as I know, two are the paths that could be followed: 1) some changes are implemented, believing that profitability and growth will resume, 2) the business is orderly wind down, and cash is returned to shareholders, who will put it to better productive uses. In the process I am aware that mistakes are going to be made. The Time Warner example, Mr. Munger referred to, might surely have been a mistake. And without any doubt a lot of other mistakes were made by Mr. Icahn! But also useful and praise-worthy goals were achieved! At least, that is what I believe… though, I might be utterly wrong! giofranchi Link to comment Share on other sites More sharing options...
bargainman Posted October 14, 2012 Share Posted October 14, 2012 I think that really the thing that led people against Biglari is that he said one thing, not just said, but preached and sold himself one way. Very very adamantly. He built up a persona around being all for the shareholders. Then he went and did things that were very shareholder unfriendly. It was like night and day. I think that's the thing about him that bugs everyone. Have the other activists on the list done this? I don't know them well enough to say. But it's really about him being disingenuous rather than being just arrogant or an activist. In fact when he was an activist against SNS and western sizzlin' almost everyone was cheering him on in spite of him being a jerk at that time. The other thing is that if you look at his history, the only guy he seems to keep happy is Cooley. The Mustang Capital guy decided to boot IIRC, as does everyone else who spends any time with him. The man does not create any loyalty at all. His franchisees sound pretty unhappy after the first go around, the SNS employees seem pretty unhappy (I remember someone posted a website from them, probably glassdoor). Again, I'm not sure how this compares to the other activists in the list. But there is also potentially a difference in that Biglari is CEO of a 'real' company now. The CEO of a company who's sole purpose is not activism probably needs to engender more loyalty.. Just more food for thought. Link to comment Share on other sites More sharing options...
premfan Posted October 14, 2012 Share Posted October 14, 2012 Good post BM. To grow a business you need loyalty, goodwill, and trust. I would advise reading dan kennedy no bs trust based marketing. The greatest trust based business in the world is walt disney which is also referenced in the book. Link to comment Share on other sites More sharing options...
dcollon Posted October 25, 2012 Share Posted October 25, 2012 New CBRL letter if anyone cares. CBRL_Letter.pdf Link to comment Share on other sites More sharing options...
dcollon Posted November 2, 2012 Share Posted November 2, 2012 When in doubt, if the results aren't going your way...delay the meeting. Maybe I'm being too cynical. Biglari Holdings Inc. News Release Friday, November 02, 2012 04:00:00 PM (GMT) SAN ANTONIO, TX, Nov. 2, 2012 /PRNewswire/ -- Biglari Holdings Inc. (NYSE: BH) (the "Company") announced today that it has decided to delay the special meeting of shareholders of the Company presently scheduled for November 2, 2012 (the "Special Meeting") until Friday, December 14, 2012 at 2:00 p.m., Central Standard Time, at Eilan Hotel, 17103 La Cantera Parkway, San Antonio, Texas 78256. The record date for the postponed meeting remains October 5, 2012. The Company encourages all shareholders who have not yet voted to do so now. Your vote is important. Please contact Morrow & Co., LLC, the Company's proxy solicitation agent for the Special Meeting, at (800) 607-0088 with any questions. Link to comment Share on other sites More sharing options...
Parsad Posted November 2, 2012 Share Posted November 2, 2012 When in doubt, if the results aren't going your way...delay the meeting. Maybe I'm being too cynical. Are you being too cynical? What is the track record when it comes to these things at BH? You are not being too cynical...this is just old hat stuff that we've seen too many times. The fact is, that it sadly usually works for him, so there is no reason to stop. Cheers! Link to comment Share on other sites More sharing options...
dcollon Posted November 13, 2012 Share Posted November 13, 2012 BH just filed on UNAM. Link to comment Share on other sites More sharing options...
OracleofCarolina Posted November 17, 2012 Share Posted November 17, 2012 UNAM announced a $1 a share dividend and this update regarding their interaction with Biglari http://finance.yahoo.com/news/unico-american-corporation-issues-statement-233400997.html Link to comment Share on other sites More sharing options...
OracleofCarolina Posted January 11, 2013 Share Posted January 11, 2013 http://sec.gov/Archives/edgar/data/93859/000092189513000091/ex101to8k07428_01112013.htm You folks should get a chuckle from this filing.. Link to comment Share on other sites More sharing options...
zippy1 Posted January 11, 2013 Share Posted January 11, 2013 http://sec.gov/Archives/edgar/data/93859/000092189513000091/ex101to8k07428_01112013.htm You folks should get a chuckle from this filing.. Yes, I do get a big one! ;D Link to comment Share on other sites More sharing options...
Buckeye Posted January 12, 2013 Share Posted January 12, 2013 Wow. Seems like a great use if time. What's great is the shareholders paid to have him set this up. Link to comment Share on other sites More sharing options...
augustabound Posted January 12, 2013 Share Posted January 12, 2013 http://sec.gov/Archives/edgar/data/93859/000092189513000091/ex101to8k07428_01112013.htm You folks should get a chuckle from this filing.. Am I understanding that he's licencing his name to the holding company? The legalese in that filing almost put me to sleep and I just wonder if I understand it. :o Link to comment Share on other sites More sharing options...
ragnarisapirate Posted January 12, 2013 Share Posted January 12, 2013 The way I read it, is that this just entrenches him even more... no? Link to comment Share on other sites More sharing options...
Parsad Posted January 12, 2013 Share Posted January 12, 2013 The company plans on developing and building "Biglari Land", where this massive ego can grow unfettered, away from the criticisms of any rational and ethical shareholder. Geez, this guy! First he changes a perfectly good, historical name (The Steak'n Shake Company), to his own name. Then he wants to license it out to shareholders! My opinion, shareholders really need to tell him to go fuck himself! Cheers! Link to comment Share on other sites More sharing options...
ragu Posted January 12, 2013 Share Posted January 12, 2013 Am I understanding that he's licencing his name to the holding company? The legalese in that filing almost put me to sleep and I just wonder if I understand it. :o augustabound, The 8-K should be easier. Best, Ragu Link to comment Share on other sites More sharing options...
Parsad Posted January 12, 2013 Share Posted January 12, 2013 The way I read it, is that this just entrenches him even more... no? Entrenches him, and at the same time protects him if someone else decides to ever run a proxy against him or buy out the company. If he goes, he gets a nice fat royalty. Cheers! Link to comment Share on other sites More sharing options...
augustabound Posted January 12, 2013 Share Posted January 12, 2013 Am I understanding that he's licencing his name to the holding company? The legalese in that filing almost put me to sleep and I just wonder if I understand it. :o augustabound, The 8-K should be easier. Best, Ragu Lol, thanks Ragu. I usually don't have a problem with filings but I think I was reading in disbelief and assumed I must have been reading it wrong. Link to comment Share on other sites More sharing options...
Charlie Posted January 12, 2013 Share Posted January 12, 2013 Some years ago I was sitting with Biglari in L.A. at an investment dinner and he was running the Lion Fund and his only holding was Berkshire Hathaway. At the time I thought he is very funny, but it gets better and better. ;) Link to comment Share on other sites More sharing options...
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