Tribe stockholders shut out Biglari

April 13, 2009
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biglariThis past week I reported on Steak n Shake’s troubles with their advertising agency. That’s not the restaurant chain’s only concern. The company’s chairman, Sardar Biglari, isn’t so talkative these days. Not surprisingly, I got shot down in my attempt to talk to anyone from Steak n Shake about this story.

But it wasn’t always this way. Once upon a time—not too long ago—Biglari used to answer his own phone. In September, 2005 Biglari’s San Antonio-based Lion Fund even placed a rather large display ad in the Indianapolis Business Journal. Oddly, the ad called out to Indianapolis Indians’ stockholders looking to sell stock. Naturally, I called the number on the ad to find out what was going on.

Biglari told me he wasn’t necessarily looking to take over majority control of the AAA minor-league baseball franchise, but said he was willing to pay a 40 percent premium on the $9,200 per share the team was offering in its buy-back offer at the time. The then 27-year-old Biglari added that he was willing to pay a higher premium for large blocks of stock. Biglari told me in 2005 that he was especially interested in talking with Indians Chairman Max Schumacher, who at the time owned 39 percent of the organization’s stock.

Biglari told me in 2005 he had been following the Indians “for years.” I suspect he meant the team’s financials and not its on-field pursuits. Sports financial analysts at the time told me the Indians probably caught Biglari’s eye due to its steady profitability and Schumacher’s age—which was 72 in 2005.

It’s clear now Biglari had (and probably still has) the financial backing to buy the Indians if he could get the team’s stockholders to sell. And if his track record with Steak n Shake is any indication, I’m pretty sure now Biglari had designs on getting a position on the Indians’ board. Then who knows what.

Schumacher told me recently Biglari didn’t have much luck in purchasing Indians stock. And even if he did get enough takers to come anywhere near a majority stake, the Indians have so many poison pills in place, it would have been a difficult coup to score.

Given the upheaval Biglari has found himself at the center of as Steak n Shake’s chief cook, and the relative tranquility and prosperity the Indians have experienced since the Lion Fund tried to muscle in, I’m betting most local baseball fans are pretty happy the ambitious Texas investor never got the pitch he was looking for from Indians’ stockholders.
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  • Let Mr.Bigliari's dealings with Steak n Shake be a lesson to everyone.

    If you happen to get lucky with a couple of investments and make a ton of money. Please be able to recognize the luck factor and just buy a big house in Boca Raton and live out your days in luxury. Don't bet it all on the line by thinking you're suddenly some business genius and go out and try to run a billion dollar company.

    Peoples livelihoods are on the line. They don't need you ruining their lives with your misplaced ambition and inflated ego.
  • If Bigliari wants to improve Steak n Shake's bottom line, he should start with the taste of steakburgers. Twenty years ago they were delicious. Now they taste terrible. Maybe he could find out why.
  • Biglari woke up on third base, and thought he hit a triple.
  • Please leave the Indians alone!
  • I couldn't agree more with Joe. A guy like Biglari would never understand the culture of an operation like the Indians. Keep him, and others with his ideas of how to run a business, out.
  • Yeah, Biglari doesn't know a thing about business... Do you all realize that without him, Steak n' Shake would be bankrupt by now? He is not a killer of companies, but a person that comes in and reallocates capital so that it yields a healthy return for all of the shareholders. Thus improving things for everyone associated with the company.

    In addition, you have no idea if he would have changed a thing with the Indians... He may well have done nothing, as he is, and has been a passive shareholder in several companies-such as Berkshire Hathaway.

    His record at Western Sizzlin', Friendly's, and Steak n' Shake speak for themselves.

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