Biglari Holdings Ups Offer For Fremont Michigan to $31

by: Inelegant Investor - December 30th, 2010   Add Comment
New Years's Eve Fireworks
Image by c r i s via Flickr

Two days after sending a letter to the Michigan Insuracorp(FMMH.OB) board reiterating its $29 cash offer, (BH) issued a press release this evening, increasing its offer to $31 per share in cash. Though it was disclosed that the companies had met on December 1, Fremont has not publicly responded to ’s previous offer, other than to say that a special committee had been convened to evaluate the offer.

Biglari’s previous takeover attempt of Fremont resulted in Fremont successfully lobbying for a Michigan state law specifically tailored to prevent its takeover. Given the premium that this offer represents to both Fremont’s trading price and its book value, it is difficult to understand how Fremont’s board can continue to ignore it.  Or perhaps they’ll just issue another press release with helpful tips for safe New Years Eve driving, and ignore the elephant in the room.

Disclosure: The author owns shares of both and

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Steak N Shake($SNS) Looks To Invest Excess Cash

by: Inelegant Investor - July 10th, 2009   Add Comment

The Company(SNS) filed an 8-k this afternoon disclosing that it has amended its credit agreement to “permit the Company to use up to $10.0 million of surplus cash to make investments of any lawful nature, so long as no event of default exists.”

In addition, the Company has granted “Chief Executive Officer, , full power and authority to make all investment and capital allocation decisions on behalf of the Company”

, through the Lion Fund, Western Sizzlin(WEST) and other affiliated parties controls 10.1% of Steak N Shake’s outstanding stock. After taking control of , Mr. Biglari gained approval to invest cash and has made various investments including .  His operating strategy of halting new company-owned stores, refranchising others and focusing on increasing sales and profitability of existing stores seems to be paying off as earlier this week reported impressive same-store sales gains in a very difficult environment for casual dining. is now doing sufficiently well, that Mr. Biglari and the board believe that cash might be deployed for a better return outside of its core business.

Though Mr. Biglari has shown a soft spot for casual dining stocks(he held a significant stake in Friendly’s prior to WEST and SNS, and at one time attempted a tender for part of JBX), he has also purchased a financial adviser, tendered for ITEX, a bartering company, and purchased real estate for development.  It will be interesting to see where and when Mr. Biglari decides to invest this excess cash.

Disclosure: I have a position in SNS and WEST


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