Biglari Sells 402,427 Shares of Cracker Barrel; Loans Fat Brands $20 million


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Fat Brands (FAT-NASDAQCM), the franchisor that owns Fatburger, Hurricane Grill and Wings, Buffalo’s Café and Buffalo’s Express, Ponderosa and Bonanza Steakhouses, and Yalla Mediterranean, has received a $20 million loan from Sardar Biglari’s managed investment funds, The Lion Fund, L.P. and The Lion Fund II, L.P.

The loan on January 29 coincides with Biglari’s sale of 402,427 shares of Cracker Barrel Old Country Store (CBRL-NASDAQ) between January 17 and February 6 at prices ranging from $168.85 to 170.87 per share. Biglari manages the two Lion Funds, of which as of September 30, 2018, were 63.9% and 93.0% owned respectively, by Biglari Holdings (BH-NYSE). Biglari remains the largest shareholder of Cracker Barrel with ownership of 15.7% of the outstanding shares.

Biglari’s loan to Fat Brand’s was used to repay its existing $16 million term loan dated July 5, 2018 with FB Lending, LLC, a specialty lender funded by a family office. The new loan accrues interest at an annual fixed rate of 20% and is payable quarterly. The company may prepay all or a portion of the outstanding principal and interest without penalty, subject to a make-whole provision providing for a minimum of six months’ interest.  The loan matures on June 30, 2020.

Fat Brands also granted a warrant to the two Lion funds to purchase up to 1,143,112 shares of Fat Brand’s common stock, exercisable only if the amounts outstanding under the loan are not repaid in full by October 1, 2019.

Fat Brands has approximately 350 franchised locations across 29 domestic states and 20 countries. CEO Andy Wiederhorn told the Monitor last month that he was working on a number of other acquisitions to add to the company’s portfolio and was looking to expand its debt facility. Fat Brands went public on October 19, 2017 issuing two million shares of common stock at $12.00 per share.

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