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Accounting Question


Kuhndan
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So Biglari now owns 19.99% of Cracker Barrel. If he owns 20% he can start reporting his % share of earnings through the income statement. He can't buy 20% because of the poison pill in place. Any accountants out there that know if he can round up his current % to 20% without tripping the poison pill? Or would he have to have the 20%?

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Any accountants out there that know if he can round up his current % to 20% without tripping the poison pill?

 

Kuhndan,

 

I am not an accountant by any means, but I doubt BH would be able to do it, especially with Sardar not on the board. AFAIK, the numbers are guidelines, it is the level of influence that is the real arbiter.

 

Or would he have to have the 20%?

 

I'd imagine so. I hadn't thought of this before, but it is possible that the 20% threshold is met via CBRL repurchases and the poison pill is not triggered in that case.

 

I know you didn't ask the question, but Sardar cares far more about economic reality than he does about accounting appearances.

 

Best,

Ragu

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For a Poison Pill to be triggered, it would need to be a factual 20% ownership which would be calculated as the number of shares owned divided by the number of share issued and outstanding.

[/quote

 

Agreed.  Poison pill is a legal question, based on facts, not an accounting question, based on judgement.]

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For a Poison Pill to be triggered, it would need to be a factual 20% ownership which would be calculated as the number of shares owned divided by the number of share issued and outstanding.

 

Cevian,

 

The question is whether the poison pill can only be triggered by an act of the acquirer and not by an act of the entity that's protecting itself. I'd imagine the answer to that question is yes.

 

Best,

Ragu

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  • 3 years later...

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