Biglari gets confident letter for loans for Cracker Barrel dividend

By Sara Rosenberg

New York, Oct. 24 - Biglari Capital Corp. received a highly confident letter for a new credit facility to fund its sought after dividend by Cracker Barrel Old Country Store, Inc. of about $20 per share, according to a news release.

The letter states that Jefferies LLC is confident in its ability to raise up to $800 million of funded debt in the form of a five-year undrawn revolver and a six-year term loan for the dividend and to refinance Cracker Barrel's existing debt.

Jefferies estimates that the debt would be rated B1/B+ and should price at a credit spread consistent with the broader B1/B+ index at the time of issuance, the release said.

Biglari, the owner of roughly 20% of Cracker Barrel's shares, has been urging Cracker Barrel to pay the dividend, and made its bid for the dividend public on Sept. 16.

Cracker Barrel's board of directors is including the dividend proposal in the company's proxy statement with a recommendation that shareholders vote against it at the annual meeting on Nov. 13.

Cracker Barrel believes that the dividend would require a substantial increase in leverage and risk profile, and that would reduce its flexibility to continue to invest in and grow the business in a way that would increase long-term results and enhance total returns to all shareholders, the release said.

Cracker Barrel is a Lebanon, Tenn.-based operator of old country stores and restaurants.

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