Dive Brief:
- Jack in the Box adopted a limited-duration stockholder rights plan Wednesday to protect the interests of stockholders, the company said in a press release. Such plans are typically referred to as a poison pill.
- The action comes after Biglari Capital informed Jack in the Box that it has acquired 9.9% of Jack in the Box shares and planned to increase its ownership stake. The move also coincides with the chain’s turnaround efforts.
- Other restaurant chains have been facing activist investor pressure in recent months. Portillo’s has been negotiating with its own activist investor since last year, which led to the appointments of Gene Lee and Jack Hartung to the board.
Dive Insight:
Poison pills can be an effective means of staving off activist investors, but they also can dilute shares. Jack in the Box said its Rights Plan is triggered if an investor acquires 12.5% or more shares in the company. At that time, all other shareholders would then be offered shares at a 50% discount.
Jack in the Box remains committed to its Jack on Track plan, which is meant to boost financial performance and shift the company toward an asset-light model, David Goebel, independent chairman of the board, said in a statement.
The Rights Plan is meant to buy the company enough time to institute its strategy and “ensure stockholders are able to realize the full potential of their investment,” Goebel said.
As part of its turnaround plan, Jack in the Box is in the process of closing up to 120 underperforming restaurants by the end of the year. The chain also said in April that it is considering strategic alternatives for Del Taco, including a possible sale.
Jack in the Box, which saw same-store sales drop 4.4% in fiscal Q2 2025, is also trying to build up its digital channels. It installed flip kiosks in nearly 1,500 restaurants as of May. Digital channels accounted for 18% of the chain’s sales during Q2.
Jack in the Box also has relatively fresh leadership following the permanent appointments of Dawn Hooper to CFO and Lance Tucker as CEO earlier this year. It also revived the COO position in late June, with the appointment of Shannon McKinney, less than a year after it eliminated the role.
Biglari has been on the offensive as an activist restaurant investor lately, also targeting El Pollo Loco. The investor, which owns nearly 15% of EPL, offered to buy the Mexican QSR in April. El Pollo Loco also instituted a poison pill in 2023 to stave off Biglari’s rapidly growing interest in the chain. Biglari has also tried for several years to influence Cracker Barrel, one of its biggest targets for activism, and attempted for the seventh time to take over the casual chain’s board in 2024.
