timmerjames Posted June 2, 2015 Share Posted June 2, 2015 So BH will receive approximately $35M in dividends from CBRL in the the next 13 months. That is almost 15% of BH's CBRL cost ($241M). Something has to give on the value of this company. Link to comment Share on other sites More sharing options...
wescobrk Posted June 2, 2015 Share Posted June 2, 2015 Did CBRL double their dividend? According to Sardar's letter the figure is $19 million a year. Link to comment Share on other sites More sharing options...
timmerjames Posted June 2, 2015 Share Posted June 2, 2015 wescobrk - They upped it 10% to $4.40/share plus declared a $3/share special dividend. Link to comment Share on other sites More sharing options...
wescobrk Posted June 2, 2015 Share Posted June 2, 2015 Oh, wow, I should have checked cbrl before I posted. Sardar is definitely happy this morning. An extra $15 million he wasn't counting on. Link to comment Share on other sites More sharing options...
wescobrk Posted June 2, 2015 Share Posted June 2, 2015 If I'm not mistaken, this will not show up in the income statement because cbrl is entirely held through the lion fund. Only a b/s improvement, right? So, for GAAP people that only follow i/s, this won't matter to them. It's good for long-term shareholders though. Link to comment Share on other sites More sharing options...
BTShine Posted June 2, 2015 Share Posted June 2, 2015 Long term vs short term? This is good for everyone that owns CBRL. It's real money. Link to comment Share on other sites More sharing options...
wescobrk Posted June 2, 2015 Share Posted June 2, 2015 Definitely agree, I was only pointing to mr. market won't necessarily care in the short -term. Link to comment Share on other sites More sharing options...
innerscorecard Posted June 3, 2015 Share Posted June 3, 2015 First time I saw SnS on one of these (dumb) lists: http://www.business-opportunities.biz/2015/06/02/top-fast-food-franchises/ Link to comment Share on other sites More sharing options...
giofranchi Posted June 3, 2015 Share Posted June 3, 2015 Sardar is definitely happy this morning. An extra $15 million he wasn't counting on. Well, Biglari had already been very clear about the need of a special dividend… though he suggested a much larger one!... Especially because CBRL management cannot buy back stocks… unless they risk increasing Biglari’s ownership above the 20% threshold! ;) Cheers, Gio Link to comment Share on other sites More sharing options...
InelegantInvestor Posted June 4, 2015 Share Posted June 4, 2015 So, here it is: https://finance.yahoo.com/news/lion-fund-ii-l-p-100000190.html "The Lion Fund II, L.P. ("The Lion Fund II") today commenced a tender offer to purchase for cash up to 575,000 shares of the common stock of Biglari Holdings Inc. (BH) at a purchase price of $420.00 per share." This is a big chunk of the float if fully subscribed, using BH's own money. If this gets any material volume, Biglari is entrenched completely. Link to comment Share on other sites More sharing options...
awindenberger Posted June 4, 2015 Share Posted June 4, 2015 So, here it is: https://finance.yahoo.com/news/lion-fund-ii-l-p-100000190.html "The Lion Fund II, L.P. ("The Lion Fund II") today commenced a tender offer to purchase for cash up to 575,000 shares of the common stock of Biglari Holdings Inc. (BH) at a purchase price of $420.00 per share." This is a big chunk of the float if fully subscribed, using BH's own money. If this gets any material volume, Biglari is entrenched completely. I really hope he manages to get the full offer tendered, then we won't have to worry about ridiculous future proxy contests. Link to comment Share on other sites More sharing options...
giofranchi Posted June 4, 2015 Share Posted June 4, 2015 I really hope he manages to get the full offer tendered, then we won't have to worry about ridiculous future proxy contests. +1 And don’t forget shareholders of BH have fully participated in two rights offerings, handing their money to be invested by Biglari the best way he might find. Now, as a shareholder no one should complain he is buying back shares with shareholders money, while entrenching himself more and more in the process. I understand critics might not like it, but as shareholders we all must have known this was coming sooner or later. And we decided to give him lots of money through the rights offering nonetheless. Now certainly is no time for complain. awindenberger, have you finished your series of articles about BH’s annual meeting? I was expecting at least one more article! ;) Cheers, Gio Link to comment Share on other sites More sharing options...
merkhet Posted June 4, 2015 Share Posted June 4, 2015 So is this the "moment of truth" for people, then? IIRC, many posters stated that they believed that Sardar Biglari's actions in getting around the cap, putting together the licensing golden parachute, etc. were all based on his lack of control over the company, and that those actions made imminent sense for someone trying to cement control. If true, then would this be the point at which you'd expect him to pull back on those actions? Would future actions of that sort then cause you to re-think your thesis? Link to comment Share on other sites More sharing options...
awindenberger Posted June 4, 2015 Share Posted June 4, 2015 I really hope he manages to get the full offer tendered, then we won't have to worry about ridiculous future proxy contests. awindenberger, have you finished your series of articles about BH’s annual meeting? I was expecting at least one more article! ;) Cheers, Gio You are correct, I should finish my last article. I got busy with work and decided to spend my time on the Chipotle article. Partially this was to see if I would get more views on an article for a more widely followed company. Surprisingly, my BH articles have for the most part generated more interest, so when I get a couple hours I'll finish up the series. Link to comment Share on other sites More sharing options...
giofranchi Posted June 4, 2015 Share Posted June 4, 2015 So is this the "moment of truth" for people, then? IIRC, many posters stated that they believed that Sardar Biglari's actions in getting around the cap, putting together the licensing golden parachute, etc. were all based on his lack of control over the company, and that those actions made imminent sense for someone trying to cement control. If true, then would this be the point at which you'd expect him to pull back on those actions? Would future actions of that sort then cause you to re-think your thesis? Mmm… I don’t think Biglari’s compensation and the licensing golden parachute might be judged together: Biglari undoubtedly wants to get paid for his work, and wants to have the means to personally buy more and more of BH… Until he has achieved that, I don’t see his compensation coming down significantly. On the other hand, the licensing golden parachute might clearly be thought of as an extravagant poison pill… But Biglari’s actions to cement his control over BH have never worried me much… Will they continue? I don’t think so… But should they continue, are they going to be cause for concern? Right now I would say not much… But I will examine them one by one as they come. As I have always said, deteriorating business results are what will certainly cause me to re-think my thesis. No doubt about that! ;) Gio Link to comment Share on other sites More sharing options...
awindenberger Posted June 4, 2015 Share Posted June 4, 2015 So is this the "moment of truth" for people, then? IIRC, many posters stated that they believed that Sardar Biglari's actions in getting around the cap, putting together the licensing golden parachute, etc. were all based on his lack of control over the company, and that those actions made imminent sense for someone trying to cement control. If true, then would this be the point at which you'd expect him to pull back on those actions? Would future actions of that sort then cause you to re-think your thesis? Mmm… I don’t think Biglari’s compensation and the licensing golden parachute might be judged together: Biglari undoubtedly wants to get paid for his work, and wants to have the means to personally buy more and more of BH… Until he has achieved that, I don’t see his compensation coming down significantly. On the other hand, the licensing golden parachute might clearly be devised as an extravagant poison pill… But Biglari’s actions to cement his control over BH have never worried me much… Will they continue? I don’t think so… But should they continue, are they going to be cause for concern? Right now I would say not much… But I will examine them one by one as they come. As I have always said deteriorating business results are what will certainly cause me to re-think my thesis. No doubt about that! ;) Gio My expectation is that Biglari will want to have a larger personal stake in the company before he removes the golden parachute. This tender offer will allow him to concentrate fully on growing the company, with no concerns of future proxy battles. In 15-20 years he'll likely have made enough incentive bonuses to own a much larger portion than now. At that stage, I think it will be in his best interest to remove the licensing deal and maybe even the incentive agreements, as the market will pay more for the stock without them. Link to comment Share on other sites More sharing options...
wescobrk Posted June 4, 2015 Share Posted June 4, 2015 So, here it is: https://finance.yahoo.com/news/lion-fund-ii-l-p-100000190.html "The Lion Fund II, L.P. ("The Lion Fund II") today commenced a tender offer to purchase for cash up to 575,000 shares of the common stock of Biglari Holdings Inc. (BH) at a purchase price of $420.00 per share." This is a big chunk of the float if fully subscribed, using BH's own money. If this gets any material volume, Biglari is entrenched completely. Wow, I didn't see this coming! Pretty funny I said a couple of days ago mr. market probably won't care about cbrl much now it's up over 10%. I thought the Lion Fund 2 only had about $150 million in cash. Where is he getting the money to pay for this? Link to comment Share on other sites More sharing options...
awindenberger Posted June 4, 2015 Share Posted June 4, 2015 So, here it is: https://finance.yahoo.com/news/lion-fund-ii-l-p-100000190.html "The Lion Fund II, L.P. ("The Lion Fund II") today commenced a tender offer to purchase for cash up to 575,000 shares of the common stock of Biglari Holdings Inc. (BH) at a purchase price of $420.00 per share." This is a big chunk of the float if fully subscribed, using BH's own money. If this gets any material volume, Biglari is entrenched completely. Wow, I didn't see this coming! Pretty funny I said a couple of days ago mr. market probably won't care about cbrl much now it's up over 10%. I thought the Lion Fund 2 only had about $150 million in cash. Where is he getting the money to pay for this? My guess is that he either sent more money up from the operating Co's, or more likely doesn't expect to actually have all 575k tendered. Link to comment Share on other sites More sharing options...
wescobrk Posted June 4, 2015 Share Posted June 4, 2015 This is classic Henry Singleton. I guess BH will be out of cash if he is taking cash from the latest q BH had about $112 million in cash I think. Obviously it depends how many tender. Link to comment Share on other sites More sharing options...
BTShine Posted June 4, 2015 Share Posted June 4, 2015 So, here it is: https://finance.yahoo.com/news/lion-fund-ii-l-p-100000190.html "The Lion Fund II, L.P. ("The Lion Fund II") today commenced a tender offer to purchase for cash up to 575,000 shares of the common stock of Biglari Holdings Inc. (BH) at a purchase price of $420.00 per share." This is a big chunk of the float if fully subscribed, using BH's own money. If this gets any material volume, Biglari is entrenched completely. Wow, I didn't see this coming! Pretty funny I said a couple of days ago mr. market probably won't care about cbrl much now it's up over 10%. I thought the Lion Fund 2 only had about $150 million in cash. Where is he getting the money to pay for this? My guess is that he either sent more money up from the operating Co's, or more likely doesn't expect to actually have all 575k tendered. We will see about $20 million in CBRL dividends soon and I'm guessing he can access the other $70 million if the opportunity is there. Link to comment Share on other sites More sharing options...
valueyoda Posted June 4, 2015 Share Posted June 4, 2015 Just sold my entire 7000 shares stake. The risk-reward is no longer as appealing as it was a few weeks ago at $350. I don't feel comfortable with Biglari taking in new shareholder capital through rights offerings, only to further his grip on the company by doing a tender offer at quite a substantial premium. Link to comment Share on other sites More sharing options...
Cevian Posted June 4, 2015 Share Posted June 4, 2015 Correct me if I'm wrong but does this tender offer represent ~25% of the Company? Link to comment Share on other sites More sharing options...
gfp Posted June 4, 2015 Share Posted June 4, 2015 Just sold my entire 7000 shares stake. The risk-reward is no longer as appealing as it was a few weeks ago at $350. I don't feel comfortable with Biglari taking in new shareholder capital through rights offerings, only to further his grip on the company by doing a tender offer at quite a substantial premium. So your share sales are over 41% of the total volume today. Why not tender at $420? Link to comment Share on other sites More sharing options...
BTShine Posted June 4, 2015 Share Posted June 4, 2015 Two thoughts: 1. Will GAMCO use this opportunity to exit the majority of their stake in BH? 2. If one thinks BH is very undervalued AND the entire 575,000 shares are (re)purchased then BH would be even more undervalued on a per share basis. Link to comment Share on other sites More sharing options...
mcmaaaaath Posted June 4, 2015 Share Posted June 4, 2015 Correct me if I'm wrong but does this tender offer represent ~25% of the Company? More like 30% of the non-Lion Fund owned shares (which clearly won't be tendered). Link to comment Share on other sites More sharing options...
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