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Biglari becomes CEO of Steak n Shake

August 8, 2008

Sardar Biglari, the rebel Steak n Shake Co. shareholder who in June persuaded fellow directors to name him chairman, now is taking on the additional post of CEO.

He replaces interim CEO Wayne Kelley, who will retain his board seat, the company announced late yesterday.

Kelley was named to the interim post in March, replacing acting CEO Alan Gilman, a 16-year veteran of Steak n Shake who was pushed aside after Biglari and his San Antonio-based Lion Fund agitated for a restructuring to boost the company's profits and lift its slumping stock.

The company had been without a permanent CEO since Peter Dunn resigned one year ago.

The Indianapolis company also said yesterday that it will seek a president who is familiar with restaurant operations.

The company is cutting costs as it prepares a broader reorganization plan that will be released within 60 days, Biglari, 30, said in a statement.

"I am confident we will regain the chain's prior status as a great company," he said.

On Tuesday, the company unexpectedly yanked a request for a Marion County tax abatement exceeding $100,000 just hours before the request was to have gone before a final hearing. The company also was to receive a $200,000 state training grant, although it isn't clear if the chain still wants the grant.

Steak n Shake had promised to keep 160 jobs and invest $2.5 million in new equipment in exchange for receiving the incentives.

Steak n Shake is scheduled to report fiscal third-quarter earnings on Monday. In May, the company reported an 11th consecutive quarter of falling same-store sales.

The company's shares were trading late this morning at $7.13, up 5 cents on the day. They have fallen 35 percent this year.

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