CAW filed an 8-K today attaching a letter from the Lion Fund indicating that the Lion Fund intends to nominate two directors. This seems odd because a) voting control of CAW is held by the owners of the Class A shares and b) the latest proxy doesn't show the Lion Fund as a significant holder of the stock. I wonder what's up.
That is interesting, the Lion fund is managed by activist investor Sardar Biglari. Sardar is already in one highly contentious takeover fight with Freemont Michigan. The ownership structure makes it hard to think that he is trying to acquire the company. The class A shareholders nominate four directors while class B only nominate three meaning A shareholders effectively control the board. According the the release they have been able to build up a stake of roughly $800K worth of stock which is under the 5% threshold where reporting is required. It seems odd to try for board seats before owning a greater than 5% stake especially when you are seeking two of the three board seats that B shareholders control.
This really can only drive up the price of the stock though.
According to the article Biglari is scheduled to meet Berman on Friday. It also says that he has built up a little over a 6% stake which is more than I had calculated previously. It still seems odd though to try to go for two board seats with such a low percentage of stock.
I think without this takeover speculation the stock would drift lower due to the announcement that the company will have a loss for the year. I would really like to see the company put some of its cash to use and buy a new product or two. There have to be some products that are not getting the attention that they deserve under larger corporate parents. Perhaps a company like Church and Dwight would be willing to part with one of its oral care brands like Pepsodent or Close-Up?