Steak n Shake Co. CEO Sardar Biglari bought 1,000 shares of the Indianapolis-based burger chain last week in another big bet the company’s shares are undervalued.
Biglari, 32, paid about $290,000 to buy the shares on Jan. 7 and Jan. 8, according to an SEC filing. Biglari now controls about 6 percent of the company’s 1.4 million shares. His stake is worth more than $26 million.
The Texas hedge fund manager used a proxy fight to gain control of Indianapolis-based Steak n Shake in 2008, then halted restaurant expansion, cut costs and introduced aggressive promotions to revive the struggling chain. The moves helped the 75-year-old chain late last year snap a 14-quarter streak of declining same-store sales.
The moves also allowed Biglari to stockpile cash and turn Steak n Shake into a holding company for non-restaurant investments. He cut capital expenditures from an average of $55 million per year to just $5.8 million in 2009, electing to save cash for other investments.
The company in December offered to acquire the outstanding shares of Fremont Michigan Insuracorp Inc. and initiated a 1-for-20 reverse stock split to discourage short-term investors.
In early trading Tuesday morning, Steak n Shake shares rose about 1 percent, to $293.39 each.