The activist investor pushing a slate of nominees to the board of struggling Luby’s Inc. sent a holiday card to shareholders, reminding them of the company’s poor performance and urging them to support its candidates.
The “season’s greeting,” filed by New York City-based investment firm Bandera Partners LLC with the Securities and Exchange Commission (SEC) on Thursday, offers up this pithy “Carol for Luby’s Shareholders”:
“Are you tired of coal in your holiday stocking?
Luby’s stock price and losses have been really quite shocking.
Vote for the current board if you want more of the same,
Vote for our slate if you demand real change,
Shareholder value is what we shall try to reclaim!”
Bandera Partners, which currently holds a 9.8% stake in Luby’s, is urging shareholders to accept four candidates to the board, including Bandera portfolio manager Jeff Gramm and his father, former Sen. Phil Gramm. The other candidates are business owners Stacy Hock and Savneet Singh.
“Because the company continues to generate steep operating losses while failing to meaningfully reduce overhead costs, we are convinced that immediate change is necessary to prevent further value destruction,” Bandera Partners wrote in its holiday message.
Luby’s currently operates 84 Luby’s restaurants, 60 Fuddruckers restaurants and one Cheeseburger in Paradise unit. It has closed 21 stores this year and laid off corporate staff in an attempt to pay down debt after issuing a “going concern warning” in September. The company reported a loss of $33.6 million in fiscal 2018 and has seen its stock valuation tumble.
"The Luby's Board and management team are committed to acting in the best interests of the Company and its shareholders," Luby's said in a statement to Restaurant Business. "The Board has carefully reviewed Bandera’s nomination notice consistent with its fiduciary duties and has unanimously recommended that shareholders instead vote in favor of the nominees recommended by the Company—in part because Bandera refused to allow the Board to interview its candidates. The Board also approved the Company’s slate, including a new director candidate, whom the Board had been considering and interviewing for several months."
Luby’s has not yet set the date for its 2019 annual meeting of shareholders.
However, in preliminary documents filed with the SEC, the company says it does not endorse any of Bandera’s nominees.
“You may receive solicitation materials from Bandera,” the filing states. “We urge you to disregard such materials.”
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