Author Topic: BH - Biglari Holdings  (Read 1294401 times)

gfp

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Re: BH - Biglari Holdings
« Reply #2740 on: April 15, 2019, 01:37:45 PM »
Quote
BH received $210M from the sale of CBRL stock (in Lion II), and the unaffiliated non-BH holders comprise 45% of the BH shares (1.39M equivalent B shares).   Last month, Lion II arranged a $160M line of credit in collateralizing their remaining CBRL position.

Lion II had $203M of debt, so the CBRL sales take care of most of that and the taxes due.  With the new Lion II line of credit, plus cash in TLF, BH, and First Guard, there is now plenty of dry powder to initiate a big buyback or tender.   If he decided to offer to take out half of the public float at $175/share, it would cost him $122M (696K shares x $175).   If he went after 2/3 of the non-BH affiliated shares, I believe he would have to offer at least $200/share to shake most of those shares loose, so that would cost him $185M.


You make it sound like there was $160 million new line of credit, when it was actually an existing $200 million loan (collateralized by CBRL shares) that was reduced to $160 million by prepaying and reducing the underlying collateral from 3.6 million CBRL shares to 2.7 million CBRL shares.


JJR

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Re: BH - Biglari Holdings
« Reply #2741 on: April 15, 2019, 02:10:53 PM »
"You make it sound like there was $160 million new line of credit, when it was actually an existing $200 million loan (collateralized by CBRL shares) that was reduced to $160 million by prepaying and reducing the underlying collateral from 3.6 million CBRL shares to 2.7 million CBRL shares."


gfp, I'm aware it was a reduction to an the exiting LOC, but unlike the $200M LOC that was fully tapped, the $160M is dry powder.   I believe the proceeds of the CBRL sale went to repaying the old line, so the $160M is now available.

gfp

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Re: BH - Biglari Holdings
« Reply #2742 on: April 15, 2019, 02:22:25 PM »
Interesting.  My interpretation was that they had directed only $40 million of the after tax CBRL share sales proceeds towards paying off the forward sale loan.

For what its worth, there is a confidential position on the 13F which may or may not be of material size.

JJR

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Re: BH - Biglari Holdings
« Reply #2743 on: April 15, 2019, 02:55:01 PM »
gfp, in the 2018 letter, the CBRL sales proceeds essentially offset the Lion II liability.  They may have the existing $160M LOC fully tapped and have $160M in cash, or they may have paid off the loan and have an untapped credit line. Either way it takes you to the same place and they have plenty of dry powder to do something.

awindenberger

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Re: BH - Biglari Holdings
« Reply #2744 on: April 15, 2019, 07:11:58 PM »
Given the massive undervaluation, Iíve been surprised and frankly disappointed that Biglari hasnít bought a significant amount of BH shares in 2019. I donít see why a tender at $175 would be a better outcome versus simply buying a couple thousand a day at current prices.

The fact he hasnít done it makes me think heís working on an insurance company purchase.

NBL0303

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Re: BH - Biglari Holdings
« Reply #2745 on: April 16, 2019, 07:48:51 AM »
Given the massive undervaluation, Iíve been surprised and frankly disappointed that Biglari hasnít bought a significant amount of BH shares in 2019. I donít see why a tender at $175 would be a better outcome versus simply buying a couple thousand a day at current prices.

The fact he hasnít done it makes me think heís working on an insurance company purchase.

The advantage to a tender is that he could likely buy more shares at a cheaper price than simply doing 10b5 open market buybacks. Those buybacks, and the Form 4s that shortly follow, have ordinarily pushed the price up very quickly. So for the same reasons that Teledyne did tenders (they did open market buybacks too, but the vast majority of the shares they repurchased were transited via tenders) - if Sardar wanted to buy a large number of shares as cheaply as possible - the tender is a better option.

If, however, he simply wanted to drive the market price up - then open market purchases would be the course.

awindenberger

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Re: BH - Biglari Holdings
« Reply #2746 on: April 21, 2019, 01:41:59 PM »
For any of you on here that are coming to the BH meeting this week and aren't in the Facebook Group, I'm planning a meet-up for anyone interested for lunch before the annual meeting on Thursday.

Hi Everyone, its time once again to get together for some lunch before the Biglari Holdings annual meeting. Given that the meeting starts at 1pm and we like to start heading over around 12:15 or so, I'm planning to arrive at Urbanspace at 10:45 Thursday morning.

Urbanspace has 16 different restaurants, so there should be something to satisfy every pallet. We'll grab some tables up on the 2nd floor and enjoy each other's company as we all wonder how many decades it will take for Sardar to deliver some value to shareholders.

Tip: Urbanspace has multiple locations around Manhatten, so make sure you are going to the Lexington location. Here's the website:
https://www.urbanspacenyc.com/570-lexington

given2invest

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Re: BH - Biglari Holdings
« Reply #2747 on: April 21, 2019, 04:45:02 PM »
i'm surprised BH even shows up to these events.  lots of chutzpah. 

Foreign Tuffett

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Re: BH - Biglari Holdings
« Reply #2748 on: April 29, 2019, 02:19:59 PM »
An update from anyone who attended the annual meeting would be much appreciated.

given2invest

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Re: BH - Biglari Holdings
« Reply #2749 on: April 29, 2019, 02:32:17 PM »
Stock action says it all...lol