El Pollo Loco Fends Off Biglari Advances with Shareholder Rights Plan

Published 1 days agoLOCO

El Pollo Loco Fends Off Biglari Advances with Shareholder Rights Plan

El Pollo Loco Holdings, Inc. recently took decisive action amidst growing pressure from activist investor Sardar Biglari and his affiliates. In August 2023, the company's Board of Directors adopted a limited-duration shareholder rights plan. This move was made after Biglari Capital Corp. rapidly increased its stake in the company to 11.3% of outstanding shares. The initiative, effective immediately and expiring in August 2024, is designed to protect shareholder interests by preventing any external entity from gaining control without providing adequate value to existing shareholders.

Following the implementation of the rights plan, Biglari entities continued to expand their holdings in El Pollo Loco. Between August 14 and August 22, 2024, they purchased approximately $4.5 million worth of shares, with individual share prices ranging from $12.47 to $13.59. This acquisition reflects Biglari's ongoing interest in influencing the fast-food chain's strategic path.

In October 2024, El Pollo Loco received an unsolicited acquisition proposal from Biglari Capital, as noted by Investing.com. This indication of interest is currently being evaluated by the company's board with the help of financial and legal advisors. While no timeline has been set, these developments underscore the significant shareholder activism El Pollo Loco is currently facing, potentially leading to strategic alterations within the company.

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