Luby’s CEO Chris Pappas, whose family controls at least 33% of the cafeteria operator’s stock, is considering a purchase of some or all of the company’s assets under a previously announced liquidation plan, according to a securities document filed Monday.
The Securities and Exchange Commission filing indicates that Pappas has entered into a confidentiality agreement to view proprietary materials that could lead to a bid. The filed document emphasizes that no offer has yet been made.
In addition to controlling about a third of Luby’s stock, Pappas and his brother Harris are also 50/50 owners of a mixed-concept restaurant group, Pappas Restaurants, which also holds a stake in Luby’s. The filing states that Chris Pappas was acting on his own behalf. It notes that Chris Pappas holds the voting rights to about 4.6 million shares of Luby’s, while Harris Pappas controls about 4.4 million. The shares for both brothers are held in custodial accounts. Pappas Restaurants owns about 1.1 million shares.
After years of declining traffic and the sale or shutdown of restaurants, Luby’s announced two weeks ago that it intends to sell its various assets, which include its namesake brand and the Fuddrucker’s fast-casual burger concept, and distribute the proceeds before dissolving the 73-year-old company. Luby’s operates about 77 cafeterias and 50 Fuddrucker’s units, and franchises about another 100 branches of the burger chain.
The board said at the time of the liquidation’s announcement that it expects the dissolution to generate $93 million to $128 million.