Biglari calls for exit of four Cracker Barrel directors

Activist investor Sardar Biglari is stepping up his fight against the board of Cracker Barrel Old Country Store by calling for the removal of Executive Chairman Mike Woodhouse and three other directors.

Biglari, who is by far Cracker Barrel's largest shareholder, late last year lost a bid for a director seat. In a letter to fellow shareholders — view it in full here [2] — he says he will try again to gain board representation and push for clearer performance goals and operational improvements at the 600-unit chain. To that end, he says Woodhouse and fellow directors Charles Jones, Robert Dale and Jack Lowery need to step down. (Biglari points out that the latter two men will this year bump up against Cracker Barrel's board retirement age limit.)

"We believe that only with [...] board-level changes will stockholders accrue substantial and sustainable value," Biglari wrote. "In the second round, we intend to raise the stakes."

In his letter, Biglari also reiterates some of his past criticisms of Cracker Barrel's flagging profitability and pledges not to sell a single of his almost 4 million shares without a minimum of two weeks' notice. He also calls on fellow shareholders — in a slightly softer tone from last fall's proxy fight — to suport his efforts for "creative disruption" in Cracker Barrel's boardroom.

"We will continue to do the heavy lifting, but in order to be successful, we require owner-oriented shareholders who will back our efforts at the next meeting of stockholders," Biglari wrote.

Biglari's letter comes on the heels of his purchase this week of another 44,000 shares [3] of Cracker Barrel. Biglari now owns 17.1 percent of the Lebanon-based restaurant and retail chain and has invested about $67 million in the stock so far this year. Cracker Barrel shares (Ticker: CBRL [4]) are up 10 percent year to date.