Sardar Biglari is not done with the restaurant business.
The investor, whose Biglari Holdings owns Steak n Shake and remains a substantial investor in Cracker Barrel, has taken a 9.1% stake in the chicken chain El Pollo Loco, according to federal securities filings.
The stake is a “passive” investment, meaning Biglari has no plans at the moment to push management on the business. But such passive investments can be changed to activist investments if the investor so chooses at any point. And Biglari has a long track record of activism in the restaurant industry.
Biglari’s stake in El Pollo Loco is worth $34.1 million, based on the chain’s trading price on Tuesday.
This is the second, major passive investment in a California-based restaurant company that Biglari has taken this year.
The company in February acquired a 5.5% stake in Jack in the Box. That stake is worth about $94 million, according to securities filings.
Biglari also continues to control 2 million shares of Cracker Barrel. The investor had spent several years and fought several losing proxy fights against the family dining chain dating back to 2011 before calling a truce last year.
Exactly what this means for El Pollo Loco remains to be seen. The chicken chain operates nearly 500 locations and has system sales of more than $1 billion. But it has never quite lived up to investors’ expectations following its 2014 IPO. The company’s stock has largely languished in the low teens since 2014, after its price came down following an early surge brought about by odd comparisons to Chipotle.
El Pollo Loco’s stock is up 6% so far this year, underperforming other restaurant companies that have largely performed well on Wall Street thus far in 2023.
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