The company, which includes Luby’s, Fuddruckers and Cheeseburger in Paradise, was hammered by the coronavirus pandemic, just like its competitors. It also has a culinary contract division.
Luby’s shares recently traded at $2.01, up 91.52%, but have dropped 10% so far this year.
“The Board of Directors, after considering a number of strategic alternatives, has approved and adopted a plan of liquidation and dissolution 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,” Luby’s said in a statement.
To be sure, a sale of the company might still be an option, said CEO Christopher Pappas. That possibility and the possibility of a liquidation payout could be boosting the stock.
Luby’s had announced June 3 that it was seeking the sale of its assets. Stockholders must approve the plan.
“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 company said.
“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,” Luby’s said.
If there’s a liquidation, Luby’s may make “liquidating distributions to stockholders of between approximately $92 million and $123 million (approximately $3.00 and $4.00 per share of common stock).”