Sardar Biglari has acquired a reputation as mercurial CEO, engaging in multiple proxy fights and hostile bids for companies he’d like to acquire. In a particularly prolonged battle, Biglari spent well over a year attempting to acquire Fremont Michigan Insuracorp through his Biglari Holdings(BH) vehicle. Fremont went so far as to have a Michigan state law passed making it impossible for Biglari to carry out his plan for a period of time. Fremont finally sold itself to another buyer at a rich premium early last year.
Given this history, we were surprised to see that in a filing this past Friday after the market closed, Biglari Holdings announced that William L. Johnson has been elected to its Board. Johnson was the Vice Chairman of the Fremont Board that so vigorously resisted Biglari’s overtures.
Biglari recently failed in a proxy fight for Board representation at Cracker Barrel(CBRL). The company’s incumbent management painted him as a hostile slash and burn executive. Is Biglari attempting to soften his image by co-opting a former rival?
Disclosure: The author holds shares in BH
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Is Biglari attempting to soften his image by co-opting a former rival?
This would be my last interpretation of the move. The obvious explanation is that Biglari is going shopping for some insurance companies and wants to take this guy with him. He values his knowledge of the industry. Sardar is a value investor – this is a value play of human capital.