HOUSTON, June 3, 2020 /PRNewswire/ -- Luby's, Inc.
(NYSE: LUB) today announced it will immediately pursue the sale of
its operating divisions and assets, including its real estate
assets, and distribute the net proceeds to stockholders after
payment of debt and other obligations. During the sale process,
certain of the Company's restaurants will remain open to continue
serving our guests.
The decision by the Company's Board of Directors follows a
comprehensive review of the Company's operations and assets led by
a Special Committee of the Board of Directors comprised of
independent directors including Gerald
Bodzy, Twila Day,
Joe McKinney, Gasper Mir, John
Morlock, and Randolph Read;
Messrs. Bodzy and Read Co-Chaired the Committee. The Special
Committee, with the assistance of financial and legal advisors,
reviewed a range of strategic alternatives available to the Company
with the objective of maximizing stockholder value. The
Special Committee recommended this course of action to the full
Board of Directors which then approved the Special Committee's
recommendations.
After a careful and thorough review of the Company's operations
(including the impact of COVID-19) and the Company's strategic
options, the Board concluded a monetization process will likely
unlock more value more quickly and with greater certainty for the
benefit of all Luby's stockholders than the other alternatives
considered by the Special Committee. A number of stockholders
have expressed their support for seeking alternatives to continuing
operating the Company's restaurants in their current form in the
present environment and this monetization program will seek to
accomplish that task in the most efficient manner.
Luby's will explore a variety of potential transactions,
including selling the Company's operating divisions: Luby's
Cafeteria, Fuddruckers, and Culinary Contract Services, as well as
its real estate, or selling the Company in its entirety. Net
proceeds obtained from any such transactions, after satisfying the
Company's debt and other obligations, will ultimately be
distributed to Luby's stockholders. The process will be
conducted in a disciplined, expeditious and cost-effective manner
which seeks to maximize returns to stockholders. The Company
has not established a definitive timeframe for completing this
process which most likely will lead to the adoption by the Board of
Directors of a formal plan of sale and proceeds distribution
followed by an orderly wind down of any remaining operations. Such
a plan of sale and proceeds distribution, if adopted by the Board,
would require stockholder approval. There can be no assurance
such a plan of sale and proceeds distribution will be adopted by
the Board or approved by stockholders.
If the Company receives an offer which would result in a sale of
the Company in its entirety which, in the view of the Board of
Directors, will provide superior value to stockholders in
comparison to the value of estimated distributions to stockholders
under the contemplated sale of assets scenario, taking into account
factors that could affect valuation, including timing and certainty
of closing, credit market risks, proposed terms and other factors,
the Company will have the ability to pursue such a transaction.
Christopher J. Pappas, Chief
Executive Officer and President of Luby's, said, "We believe that
proceeding with this sale process followed by distributions
contemplated under a proceeds distribution plan 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. This path also provides for
the potential to place the restaurant operations with
well-capitalized owners moving forward."
The Company on behalf of the Special Committee has retained Duff
& Phelps Securities, LLC to assist it with the sale of Luby's
Cafeteria and Culinary Contract Services and has retained Brookwood
Associates LLC to assist it with the sale of Fuddruckers.
The Company noted there can be no assurance one or more sale
transactions will result from this process.
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 or the Company
and the use of proceeds received from such sales.
Forward Looking Statements
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 possible
inability of the Company to sell itself, its operations or assets
on terms deemed to be favorable to the Company or its stockholders;
if presented, whether the Company's stockholders will approve the
sale and proceeds distribution plan described above; 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 and Current Reports on Form
8-K.
For additional information contact:
Dennard Lascar Investor
Relations
Rick Black / Ken Dennard
LUB@dennardlascar.com
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SOURCE Luby's, Inc.