HOUSTON, Sept. 8, 2020 /PRNewswire/ -- Luby's,
Inc. ("Luby's") (NYSE: LUB), today announced that the
Company's Board of Directors (the "Board"), after considering a
number of strategic alternatives, has approved and adopted a plan
of liquidation and dissolution (the "Plan of Liquidation" or the
"Plan") that provides for the sale of the Company's assets and
distribution of the net proceeds to the Company's stockholders,
after which the Company will be dissolved. This follows Luby's
June 3, 2020 announcement that it is
seeking the sale of its assets. Approval of the Plan by the
Company's stockholders is the next step in connection with these
matters.
The Company intends to hold a special meeting of stockholders to
seek approval of the Plan for which it will file preliminary proxy
materials with the Securities and Exchange Commission. The Company
believes that the sale of assets pursuant to its monetization
strategy and the dissolution will provide stockholders with an
opportunity to receive cash distributions that maximize the value
of their investment. The assets to be sold include operating
divisions Luby's Cafeterias, Fuddruckers, and the Company's
Culinary Contract Services business, as well as the Company's real
estate.
The Company will also provide an opportunity at the special
meeting for its stockholders to vote on maintaining or revoking the
Rights Agreement, often referred to as a "poison pill." In
addition, the Company will also seek stockholder approval to reduce
the size of the Board of Directors and to permit action of
stockholders by written consent.
The Plan of Liquidation outlines an orderly sale of the
Company's businesses, operations, and real estate, and an orderly
wind down of any remaining operations. If the Company's
stockholders approve the Plan, the Company intends to attempt to
convert all of its assets into cash, satisfy or resolve its
remaining liabilities and obligations, including contingent
liabilities and claims and costs associated with the liquidation of
the Company, and then file a certificate of dissolution. The
Company currently anticipates that its common stock will be
delisted from the NYSE upon the filing of the certificate of
dissolution, which is not expected to occur until the earlier of
the completion of the asset sales or three years, but the delisting
of its common stock may occur sooner in accordance with the
applicable rules of the NYSE.
The decision by the Board to approve the Plan follows a
comprehensive review of the Company's operations and assets led by
a Special Committee of the Board comprised of independent directors
Gerald Bodzy, Twila Day, Joe
McKinney, Gasper Mir,
John Morlock, and Randolph Read. Messrs. Bodzy and Read,
Co-Chairmen of the Special Committee, jointly commented, "This Plan
of Liquidation is the next logical step in the Company's previously
announced plan to maximize value of the Company through the sale of
its operations and assets. Our stockholders have expressed their
support for seeking alternatives to continuing to operate the
Company's restaurants in their current form, and we believe the
Plan of Liquidation will allow the Company to accomplish that task
in the most efficient manner."
Christopher J. Pappas, Chief
Executive Officer and President of Luby's, said, "We believe that
moving forward with a Plan of Liquidation will maximize value for
our stockholders, while also preserving the flexibility to pursue a
sale of the Company should a compelling offer that delivers
superior value be made. The Plan also continues to provide for the
potential to place the restaurant operations with well-capitalized
owners moving forward."
If at any time, including after the Plan is approved by
stockholders, the Company receives an offer for a corporate
transaction that, in the view of the Board of Directors, will
provide superior value to its stockholders in comparison to the
value of the estimated distributions under the Plan, taking into
account factors that could affect valuation, including timing and
certainty of closing, credit market risks, proposed terms and other
factors, the Plan could be abandoned in favor of such an
alternative transaction.
While no assurances can be given, the Company currently
estimates, assuming the sale of its assets pursuant to its
monetization strategy, that it could make aggregate liquidating
distributions to stockholders of between approximately $92 million and $123
million (approximately $3.00
and $4.00 per share of common stock,
respectively, based on 30,752,470 shares of common stock
outstanding as of September 2,
2020). Aggregate payments will likely be paid in one or more
distributions. The Company cannot predict the timing or
amount of any such distributions, as uncertainties exist as to the
value it may receive upon the sale of assets pursuant to its
monetization strategy, the net value of any remaining assets after
such sales are completed, the ultimate amount of expenses
associated with implementing its monetization strategy,
liabilities, operating costs and amounts to be set aside for
claims, obligations and provisions during the liquidation and
winding-up process and the related timing to complete such
transactions and overall process.
Duff & Phelps Securities, LLC, acted as financial advisor
and Gibson, Dunn & Crutcher LLP served as legal advisor to the
Special Committee in connection with the Committee's strategic
review. The Special Committee recommended the approval of the Plan
to the full Board of Directors which then unanimously approved the
Special Committee's recommendation.
Important Additional Information filed with the
SEC
This press release is for informational purposes only. It is not
a solicitation of a proxy. In connection with the Plan, the Company
intends to file with the SEC a preliminary proxy statement and
other relevant materials. THE COMPANY'S STOCKHOLDERS ARE URGED TO
READ THE PRELIMINARY PROXY STATEMENT AND THE OTHER RELEVANT
MATERIALS THAT THE COMPANY WILL FILE WITH THE SEC WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
COMPANY AND THE PLAN. Stockholders may obtain a free copy of the
proxy statement and the other relevant materials (when they become
available), and any other documents filed by the company with the
SEC, at the SEC's web site at http://www.sec.gov. In addition, the
Company will make available or mail a copy of the definitive proxy
statement to stockholders of record on the record date when it
becomes available. A free copy of the proxy statement, when it
becomes available, and other documents filed with the SEC by the
Company may also be obtained by directing a written request to:
Luby's, Inc., Investor Relations, 13111 Northwest Freeway, Suite
600, Houston, Texas 77040 or at
http://www.lubysinc.com/investors/filings. Stockholders are
urged to read the proxy statement and the other relevant materials
when they become available before making any voting or investment
decision with respect to the Plan of Liquidation.
Participants in the Solicitation
The Company and its
directors and executive officers may be deemed to be participants
in the solicitation of proxies from the Company's stockholders in
connection with the Plan. Information about the persons who may be
considered to be participants in the solicitation of the Company's
stockholders in connection with the Plan, and any interest they
have in the Plan, will be set forth in the definitive proxy
statement when it is filed with the SEC. Additional information
regarding these individuals is set forth in the Company's proxy
statement for its 2020 annual meeting of stockholders, which was
filed with the SEC on December 30,
2019. These documents may be obtained free of charge at the
SEC's website at www.sec.gov. In addition, stockholders may obtain
free copies of the documents filed with the SEC by the Company by
directing a written request to: Luby's, Inc., Investor Relations,
13111 Northwest Freeway, Suite 600, Houston, Texas 77040 or at
http://www.lubysinc.com/investors/filings.
About Luby's
Luby's, Inc. (NYSE: LUB) operates two
core restaurant brands: Luby's Cafeterias and Fuddruckers. Luby's
is also the franchisor for the Fuddruckers restaurant brand. In
addition, through its Luby's Culinary Contract Services business
segment, Luby's provides food service management to sites
consisting of healthcare, corporate dining locations, sports
stadiums, and sales through retail grocery stores.
This press release contains statements that are
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements
contained in this press release, other than statements of
historical fact, are "forward-looking statements" for purposes of
these provisions, including the statements regarding sales of
assets, effects of the Plan, expected proceeds from the sale of
assets, and expected proceeds to be distributed to
stockholders.
Luby's cautions readers that various factors could cause its
actual financial and operational results to differ materially from
those indicated by forward-looking statements made from
time-to-time in news releases, reports, proxy statements,
registration statements, and other written communications, as well
as oral statements made from time to time by representatives of
Luby's. The following factors, as well as any other cautionary
language included in this press release, provide examples of risks,
uncertainties and events that may cause Luby's actual results to
differ materially from the expectations Luby's describes in such
forward-looking statements: general business and economic
conditions; the effects of the COVID-19 pandemic; the impact of
competition; our operating initiatives; fluctuations in the costs
of commodities, including beef, poultry, seafood, dairy, cheese and
produce; increases in utility costs, including the costs of natural
gas and other energy supplies; changes in the availability and cost
of labor; the seasonality of Luby's business; changes in
governmental regulations, including changes in minimum wages; the
effects of inflation; the availability of credit; unfavorable
publicity relating to operations, including publicity concerning
food quality, illness or other health concerns or labor relations;
the continued service of key management personnel; and other risks
and uncertainties disclosed in Luby's annual reports on Form 10-K
and quarterly reports on Form 10-Q. Further information regarding
the risks, uncertainties and other factors relating the Plan, the
expected net proceeds from the sale of assets, and expected
proceeds to be distributed to stockholders, will be discussed under
the section "Risk Factors" in the definitive proxy statement that
will be filed with the SEC in connection with the Plan, when it
becomes available.
For additional information contact:
Dennard Lascar Investor
Relations
Rick Black / Ken Dennard
LUB@dennardlascar.com
View original
content:http://www.prnewswire.com/news-releases/lubys-inc-board-of-directors-adopts-plan-of-liquidation-and-dissolution-301125261.html
SOURCE Luby's, Inc.