Luby's has taken the next step toward "liquidation and dissolution." In a press release issued Tuesday, November 10, the Texas-based cafeteria chain announced that Institutional Shareholder Services Inc. ("ISS"), a proxy voting advisory firm, has recommended that Luby's stockholders vote in favor of the plan proposed by the company's board of directors to wind down operations and delist itself from the New York Stock Exchange (NYSE: LUB).
In its recommendation, ISS cited the "multi-year process" that Luby's has undertaken prior to proposing this step. The firm also noted that the stock market has reacted favorably to the announcement, with the value of Luby's shares more than doubling in value since September. A vote to approve the plan will take place November 17 at a special meeting of the company's stockholders.
First announced in September, the liquidation plan calls for Luby's to sell its various assets, including locations of Luby's and hamburger chain Fuddruckers, as well as its real estate holdings. Ultimately, Luby's hopes to generate between $92 million and $123 million from the process, which represents between $3 and $4 per share of its stock (approximately 30.7 million shares outstanding). Once approved, the plan could take up to a year to complete, the Houston Business Journal reports.
Currently, Luby's operates 80 Luby's and Fuddruckers locations across Texas and beyond. Many may remain open until the liquidation process is complete.
"We are here today and plan to be here for a long time," chief operating officer, Todd Coutee said in a previous statement. "We greatly value our loyal guests and invite them to continue to come out and dine in with us, or get our great food to go."
As for the possibility of a rescue plan to keep the restaurants open, Luby's CEO and Pappas Restaurants co-owner Christopher Pappas has yet to make an offer to purchase Luby's assets, the company added. In September, Pappas and his brother Harris Pappas entered into a confidential agreement with Luby's that granted them access to confidential financial information for the purposes of potentially buying the company. Together, the brothers own approximately 36 percent of Luby's outstanding shares.