Biglari did two things of note:
He is consolidating his Biglari Capital in BH now for around $4 million
He is offering 1 share of BH in exchange for ~9 shares of AAP with the 2% market premium
(1.4 million shares buying in the offering total)
a few nuggets from it is:
Biglari capital holds over 70k in BH shares which is getting folded into the company and will also help with the 166k in shares he is issuing to buy the AAP shares.
He is proposing to pay himself buffett partnership (or pabrai if you will) style by basing his compensation on a 5% hurdle rate for book value and receiving 25% of book value growth over 5%. Given that his after-tax compensation must be spent half on BH shares (new rule) but for the head of a public company, this is a pretty hefty payment plan. In otherwords if he grew Book Value at 8% (with 270m in BV currently), he would end up getting around a $2 million payment.
Interested to see what people's thoughts are on this and why he couldn't just go into the market to purchase this stuff and why he's giving up so much of his company to do so (must love that AAP stock!)
also please correct any mistakes if you see them.