Luby's asks shareholders to reject Ramius' board nominees

By Angela McDaniels

Tacoma, Wash., Dec. 6 - Luby's, Inc. urged its shareholders to vote for its directors at the annual meeting on Jan. 15 and to withhold votes from the nominees of Ramius Capital Group, LLC.

The company issued a statement on Thursday in which it called Ramius a "notorious dissident shareholder activist" and a short-term investor "whose interests are clearly not aligned with those of all Luby's shareholders."

As previously reported, Ramius nominated Stephen Farrar, William J. Fox, Brian G. Grube and Matthew Q. Pannek for election to Luby's board.

"Ramius is pushing a financial releveraging scheme of the company's balance sheet through the sale and leaseback of the company's owned real estate," Luby's chairman Gasper Mir III said in the statement.

"Our board of directors and management team thoroughly evaluated Ramius' suggestion and determined it would deplete the company's assets and result in Luby's paying more each year to rent the properties than we generate in net income.

"We are confident that by owning, rather than leasing our properties, Luby's will generate better operating margins and greater cash flow returns. This, in turn, will further strengthen Luby's for sustainable and profitable growth and enable us to drive greater shareholder value."

Mir said the interests of the board are "closely aligned" with those of the company's shareholders and noted that Luby's two largest shareholders - chief executive officer Chris Pappas and chief operating officer Harris Pappas - are members of the board.

Luby's is a Houston-based restaurant operator.

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