SCHEDULE: Activist Investor Biglari Holdings Discloses 9.98% Stake in Jack in the Box, Citing Poison Pill Adoption

Biglari Holdings and its affiliates have filed a Schedule 13D for their 9.98% stake in Jack in the Box Inc., indicating potential engagement with management and the board following the unilateral adoption of a poison pill by the Issuer.

Summary

• Biglari Holdings Inc. and its affiliated entities, including The Lion Fund, L.P., The Lion Fund II, L.P., and various insurance and restaurant subsidiaries, collectively reported beneficial ownership of 1,884,269 shares of Jack in the Box Inc. common stock.
• This stake represents approximately 9.98% of the 18,879,446 shares outstanding as of May 7, 2025.
• The Reporting Persons previously filed a Schedule 13G, indicating no intent to influence control unless welcomed by the Issuer.
• The filing of this Schedule 13D was prompted by the Jack in the Box board's unilateral adoption of a poison pill in response to Biglari's investment.
• The Reporting Persons intend to engage with the Issuer's Board and management, potentially proposing changes to operations, organizational documents, Board composition, and capital or corporate structure.
• All shares were purchased with working capital, which may include margin loans, through open market transactions.

Sentiment

Score: 4

Explanation: The sentiment is moderately negative due to the Issuer's defensive action (poison pill) in response to the investment, indicating a potential conflict rather than a collaborative engagement. While the investors are committed, the immediate reaction from the company suggests friction.

Positives

• The Reporting Persons, led by Sardar Biglari, have accumulated a significant stake of 9.98% in Jack in the Box Inc., indicating a strong belief in the company's underlying value.
• The filing signals an intent to actively engage with management and the board to potentially drive strategic and operational improvements.

Negatives

• The Issuer's board unilaterally adopted a poison pill, suggesting resistance to the Reporting Persons' investment and potential future proposals.
• The adoption of a poison pill indicates a potentially contentious relationship between the activist investor and the current management/board, which could lead to prolonged disputes.

Risks

• The Issuer's adoption of a poison pill could hinder the Reporting Persons' ability to increase their ownership or influence corporate control.
• Potential disagreements between the Reporting Persons and Jack in the Box's management/Board regarding strategic direction, operations, or corporate structure could lead to a proxy contest or other disruptive actions.
• The outcome of future engagements or proposals is uncertain and may not result in the desired changes for the Reporting Persons.

Future Outlook

The Reporting Persons intend to continuously review their investment in Jack in the Box Inc. and may take various actions, including purchasing or selling additional shares, engaging in short selling, or hedging, depending on factors such as the Issuer's financial position, investment strategy, share price levels, and general market and industry conditions. They also plan to engage with the Board and management to propose potential changes to operations, corporate governance, and capital structure.

Management Comments

• The Reporting Persons previously filed a Schedule 13G with respect to their investment in the Issuer, as they did not acquire the Shares to influence control of the Issuer, and, in fact, subsequently indicated to the Issuer's management that they would not exceed their current ownership of the outstanding Shares unless such investment was welcomed by the Issuer.
• In view of the Issuer's action [unilateral adoption of a poison pill], the Reporting Persons are preemptively filing this Schedule 13D in advance of a scheduled meeting with members of the Board and management.
• The Reporting Persons may seek to engage with the Board and management and possibly make proposals (whether preliminary or final) with respect to, among other things, potential changes in the Issuer's operations, organizational documents, composition of the Board, and capital or corporate structure.

Industry Context

This filing represents a significant activist stake in the quick-service restaurant (QSR) industry, a sector often targeted by activist investors seeking to unlock value through operational efficiencies, strategic shifts, or capital structure optimization. The adoption of a poison pill by Jack in the Box Inc. highlights a defensive posture common among companies facing activist pressure, aiming to deter hostile takeovers or significant shareholder influence. This situation could set a precedent for how other QSR companies respond to similar investor engagements.

Comparison to Industry Standards

• NA. This document primarily details an activist investment and the response from the target company, rather than providing performance metrics for comparison against industry benchmarks or specific competitors.

Corporate Governance

Stakeholder Impact

• Shareholders: Potential for increased shareholder value if activist proposals lead to positive changes, but also risk of prolonged disputes or uncertainty if engagement is contentious. The poison pill could dilute existing shareholders if triggered.
• Management/Board: Increased scrutiny and pressure from a significant activist investor, potentially leading to changes in strategy or personnel.
• Employees: Potential for operational changes that could impact employment, depending on the nature of the proposed strategic shifts.
• Customers/Suppliers: Indirect impact from potential operational changes or strategic shifts within Jack in the Box Inc.

Next Steps

• Reporting Persons plan to engage with Jack in the Box Inc.'s Board and management.
• Reporting Persons may make proposals regarding changes in operations, organizational documents, Board composition, and capital or corporate structure.
• Reporting Persons intend to communicate with other shareholders or third parties.
• Reporting Persons will continuously review their investment and may adjust their holdings (buy, sell, hedge) based on various market and company factors.

Key Dates

Recommendation

Keywords

Jack in the Box, Biglari Holdings, Schedule 13D, Activist Investor, Shareholder Activism, Corporate Governance, Poison Pill, Restaurant Industry, Common Stock, Investment