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Global activist hedge fund Ramius Capital Group LLC together with affiliates on Wednesday upped their activist campaign at Luby’s Inc. by launching a proxy contest to nominate four director candidates to the Texas-based cafeteria-style restaurant operator’s board. “Ramius believes that its nominees can prove valuable in helping management evaluate and execute on its new growth strategy, explore various strategic and financing alternatives to enhance shareholder value, and ensure that the company is being run solely for the benefit of all Luby’s shareholders,” Ramius wrote in a regulatory filing on Wednesday. “While we are excited about the potential growth prospects for the business, we believe the board can be strengthened to enable a higher probability of the most successful outcome.“ The Houston-based company with a $282 million stock market capitalization operates 130 cafeteria-style restaurants in Texas. According to the filing, Ramius owns a 7.1% Luby’s stake.
The proxy contest is the second step in a public campaign for change launched by Ramius on July 30 when the activist fund sent a letter to Luby’s board and president, Christopher Pappas, outlining grievances the activist fund manager has with the operation of the company. “As the largest independent shareholder of Luby's, we believe that the company is undervalued and we are concerned that both management and the board of directors have not taken appropriate action to unlock the intrinsic value of the company,” according to the July 30 letter. Apparently, Ramius’ concerns were not resolved. Ramius and its affiliates reported a 6.5% stake on July 30. — Ron Orol Ron Orol is a Washington-based reporter for The Deal and author of Extreme Value Hedging: How Activist Hedge Fund Managers Are Taking on the World. See SEC filing Categories![]()
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