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4-Traders Homepage  >  Equities  >  Nyse  >  Biglari Holdings Inc    BH

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Purchase Agreement

Biglari Holdings Inc. (the “Company”) is engaged in discussions to amend the Stock Purchase Agreement, dated as of May 22, 2017 (the “Purchase Agreement”), among BHIC Inc., a wholly owned subsidiary of the Company (“BHIC”), John M. McGraw, JDM Living Trust, Michael J. McGraw and the Michael Joseph McGraw Family Trust (the “MJM Trust”). The entry into the Purchase Agreement was previously reported in a Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on May 25, 2017. In connection with the potential amendment, it is contemplated, among other things, that (i) BHIC would purchase 50.1% of Western Service Contract Corp. (“Western”), the parent company of Pacific Specialty Insurance Company, and 50.05% of McGraw Insurance Services L.P. (“McGraw”) for an aggregate purchase price of $150.3 million, consisting of $12.3 million in cash payable at the closing of the transaction and $138.0 million of deferred payments over 10 years, (ii) the boards of directors of Western and its subsidiaries and the subsidiaries of McGraw would consist of an equal number of representatives appointed by BHIC and the MJM Trust, subject to BHIC’s right to obtain majority representation on the boards by paying to the MJM Trust an amount equal to $5,000,000 per year (which amounts would be credited against the purchase price for the MJM Trust’s equity interest, as described in (iv) below), (iii) Sardar Biglari would have full investment and capital allocation authority for Western, McGraw and their respective subsidiaries, subject to compliance of such investments with applicable law, and (iv) BHIC would have the right to purchase the MJM Trust’s entire equity interest in McGraw and Western at any time following the closing of the transaction for a purchase price equal to $150.0 million up to the ninth anniversary of the closing date (and for fair market value thereafter), and the MJM Trust would have the right to require BHIC to purchase the MJM Trust’s entire equity interest after the 11th anniversary of the closing date for the fair market value thereof. The terms of the potential amendment remain under discussion and could differ materially from the terms stated above, and there is no assurance that the parties will reach agreement on the terms of any amendment to the Purchase Agreement or otherwise with respect to the transactions contemplated by the Purchase Agreement.

Services Agreement

On September 15, 2017, the Company entered into a Services Agreement with Biglari Enterprises LLC, a Delaware limited liability company, and Biglari Capital Corp., a Texas limited liability company (“BCC,” and together with Biglari Enterprises LLC, the “Biglari Entities”). BCC is the general partner of each of The Lion Fund, L.P., a Delaware limited partnership (“TLF I”), and The Lion Fund II, L.P., a Delaware limited partnership (“TLF II”). The Biglari Entities are solely owned by our Chairman and Chief Executive Officer Sardar Biglari.

The Services Agreement was executed in connection with a review of the relationships and transactions between the Company and BCC. After careful consideration, including a review conducted by a public accounting firm of the business and administrative-related costs incurred by the Company in connection with its investments, the Company’s Governance, Compensation and Nominating Committee, comprised solely of independent board members, approved the Services Agreement as a replacement of the Shared Services Agreement between the Company and BCC, dated July 1, 2013, and certain other arrangements the Company previously had to provide business and administrative-related services. Under the terms of the Services Agreement, the Company will no longer provide the business and administrative-related services. Instead, the Biglari Entities will assume the responsibility to provide the services and the Company will pay a fixed fee to the Biglari Entities. The Company believes the new arrangement will benefit the Company by eliminating the risk of higher expenses as well as removing risks associated with financial obligations. In addition, the Company anticipates this new arrangement will reduce its expenses by approximately $1.5 million annually.

The Services Agreement has a five-year term. The fixed fee is $700,000 per month for the first year and will adjust in years two through five by an amount equal to the applicable annual consumer price index. The agreement will automatically renew for successive five-year periods, unless terminated by either party effective at the end of the initial or renewed term, as applicable. The Services Agreement does not alter the Company’s hurdle rate by which the incentive reallocation to BCC is determined. The hurdle rate will remain at 6% per annum with respect to the limited partner interests of the Company and its subsidiaries in each of TLF I and TLF II in lieu of 5% per annum for all other limited partners.

The foregoing summary of the Services Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Services Agreement, a copy of which is attached as Exhibit 10.1 to this report and is incorporated herein by reference.

TLF II expects to enter into a Trading Plan (the “Purchase Plan”) to Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, with respect to shares of common stock ofthe Company (the “Shares”). It is anticipated that, under the Purchase Plan, a broker dealer will make periodic purchases of Shares on behalf of TLF II at prevailing market prices, subject to the terms of the Purchase Plan.

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BIGLARI HOLDINGS INC. (NYSE:BH) Files An 8-K Entry into a Material Definitive Agreement

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09/18/2017 | 02:02am CEST

BIGLARI HOLDINGS INC. (NYSE:BH) Files An 8-K Entry into a Material Definitive AgreementItem 1.01.

Entry into a Material Definitive Agreement.

Item 9.01.

Financial Statements and Exhibits.

(d) Exhibits.

Forward-Looking Statements

This document includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ markedly from those projected or discussed here. The Company cautions readers not to place undue reliance upon any such forward-looking statements, for actual results may differ materially from expectations. The Company does not update publicly or revise any forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized. Further information on the types of factors that could affect the Company and its business can be found in the Company’s filings with the SEC.

BIGLARI HOLDINGS INC. ExhibitEX-10.1 2 ex10_1.htm EXHIBIT 10.1 – SERVICES AGREEMENT Exhibit 10.1   SERVICES AGREEMENT This Services Agreement (this “Agreement”) is made and entered into as of September 15,…To view the full exhibit click here
About BIGLARI HOLDINGS INC. (NYSE:BH)
Biglari Holdings Inc. is a holding company owning subsidiaries engaged in various business activities, including media, property and casualty insurance, and restaurants The Company’s segments include Restaurant Operations, First Guard, Maxim, Other and Corporate. The Company’s restaurant operations’ activities are conducted through approximately two restaurant concepts operated by subsidiaries Steak n Shake Inc. (Steak n Shake) and Western Sizzlin Corporation (Western). Steak n Shake is engaged in the ownership, operation and franchising of Steak n Shake restaurants. Western is engaged primarily in the franchising of restaurants. The Company’s insurance business consists of First Guard Insurance Company and its agency, 1st Guard Corporation. First Guard is a direct underwriter of commercial trucking insurance, selling physical damage and non-trucking liability insurance to truckers. Its media business consists of Maxim. Maxim’s business lies principally in media and licensing.

The post BIGLARI HOLDINGS INC. (NYSE:BH) Files An 8-K Entry into a Material Definitive Agreement appeared first on Market Exclusive.

© Market Exclusive 2017, source Market Exclusive

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Chart BIGLARI HOLDINGS INC
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Biglari Holdings Inc Technical Analysis Chart | BH | US08986R1014 | 4-Traders
Technical analysis trends BIGLARI HOLDINGS INC
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TrendsBullishBearishBearish
Income Statement Evolution
Consensus
Sell
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Mean consensus HOLD
Number of Analysts 1
Average target price -
Spread / Average Target -100%
EPS Revisions
Managers
NameTitle
Sardar Biglari Chairman & Chief Executive Officer
Ruth J. Person Independent Director
Phillip L. Cooley Vice Chairman
Kenneth R. Cooper Independent Director
James P. Mastrian Independent Director
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