LEBANON, Tenn. (AP) -- Cracker Barrel Old Country Store Inc. recommended Thursday that shareholders vote against a $20 special dividend urged by an activist investor.
Biglari Holdings Inc. is Cracker Barrel's biggest stockholder, proposed the dividend last week. Sardar Biglari's fund runs the Steak n Shake and Western Sizzlin restaurant chains. Biglari has twice sought a spot on Cracker Barrel's board of directors, but shareholders have not elected him.
The restaurant chain, which runs 624 locations in the U.S., said paying the special dividend would cost more than $475 million and could hurt its balance sheet. It pays a 75-cent quarterly dividend.
Shareholders can vote on whether they want a special dividend at the company's annual meeting on Nov. 13.
Lebanon, Tenn.-based Cracker Barrel also said Thursday that it could buy up to $50 million of its own stock. Buying back company stock can boost earnings per share.
Shares added 5 cents to $102.42 in midday trading.