Comments on: Sardar Biglari is CEO of Steak N Shake!

By: Steak N Shake to merge with Western Sizzlin | Street Capitalist: Event Driven Value Investments

Thu, 13 Aug 2009 17:27:29 +0000

[...] Sardar Biglari is CEO of Steak N Shake! (Street Capitalist) [...]

By: Travis

Travis — Fri, 08 Aug 2008 22:47:33 +0000

As a SNS shareholder, I would not be too happy about a merger. I think SNS it MUCH more undervalued than WEST. As an SNS shareholder I’ve already got Sidhar’s capital allocation abilities working for me.
Also as an investor, I’d much rather be able to decide how much of each good company I would like to own, than be forced to buy at a certain ratio.
One final point, a merger with his other company, after just naming himself chairman AND CEO, would be some pretty shady corporate governance, and would lend credence to the old managements claims he was just a corporate raider.

By: ragnar

ragnar — Fri, 08 Aug 2008 22:26:25 +0000

I really doubt that a merger will occur…

Is anybody mad about the 500K SNS is paying to the Lion Fund and WEST over the proxy fight? While a small sum, it is not in the interest of SNS shareholders-proxy fights are a cost of doing business, and with WEST/The Lion Fund sitting on millions of shares in SNS (with an intrinsic value a ton more than it is trading at) there is no reason for them to take spoils of war.

By: Andy

Andy — Fri, 08 Aug 2008 14:53:44 +0000

merger of equals..no premiums paid…everyone forgets this option…I am not sure if I am for it or against it. Just know it is a potential. Their performances are already linked closely with so much of WEST’s assets invested in the success of SNS.

By: Tariq

Tariq — Fri, 08 Aug 2008 14:10:28 +0000

You’re right Jeff, the merger comment was a little left-field.

I do wonder about Sardar’s long term plan for SNS though. It’s not like he was named simply “interim” CEO (maybe that doesn’t matter?) So I wonder what his plan is in the long term to remain involved with the company in an executive capacity.

I think it’s a lot to have on one plate – The Lion Fund, WEST, and now CEO of SNS but I know that he’ll be able to handle it all quite well.

By: Biglari Takes on More Responsibility : Circle of Competence

Biglari Takes on More Responsibility : Circle of Competence — Fri, 08 Aug 2008 14:08:21 +0000

[...] Check out the perspective from The Street Capitalist here. [...]

By: Jeff

Jeff — Fri, 08 Aug 2008 13:46:41 +0000

I’m not so sure about your last comment there. The difference between these scenarios (WEST/SNS vs. KMT and Sears) is comparable sizes. WEST is a $45mm company while Steak N Shake is $200mm, 4x the same. There’s no way WEST could swallow SNS.

On the other hand an SNS purchase of WEST doesn’t strike me as particularly likely, either. Feasibly, this could happen. But, knowing how Sardar thinks, and his desire to build a Berkshire-like franchise, it seems that he wouldn’t want something like this to occur. Imagine Buffett allowing Berkshire to be taken over in the seventies.

Also, Lampert bought KMart for a strategic reason (real estate). Sardar is trying to use as little capital as possible, so that wouldn’t be a reason here.

I just can’t see a good reason why it would happen. Sardar has placed very little value on “synergy,” in fact he’s pretty much railed against it in the meetings and in his letters. A merger on those grounds wouldn’t be consistent with that philosophy.

Great post though, thanks for bringing this up. I may just link to your write up instead of doing my own!