CARLSBAD Calif. The parent to the 195-unit Rubio’s Fresh Mexican Grill chain has rejected the unsolicited $80 million buyout proposal that came earlier this month from an investor group.
The board of directors of Rubio’s Restaurants Inc. voted unanimously to turn down the $8-per-share buyout offer from a group including Alex Meruelo, a developer and Rubio’s investor, and Levine Leichtman Capital Partners IV LP, a private equity firm, Rubio’s said in a statement this week.
After a review of the deal by a special committee of the board, the company said it was determined that the offer was “not in the best interest of the company’s stockholders.”
“We believe that Rubio’s continues to have a winning strategy for fast casual, which has become the fastest growing segment of the restaurant industry,” said Dan Pittard, Rubio’s president and chief executive. “We offer an attractive casual ambiance and menu selection at prices significantly below casual dining price points. Our market research confirms that a growing number of guests understand this value proposition, and we believe we are very well positioned now and when the economy improves.”
Rubio’s officials also denied allegations put forth in a recent shareholder lawsuit that charged the company, its directors and officers with breach of fiduciary duties in connection with the buyout offer. Calling the lawsuit “meritless,” officials said Thursday in a statement that “the company does not have, and has never had, an agreement or arrangement to sell any stock or assets to the Meruelo Group.”
Meruelo and affiliates own about 10-percent of Rubio’s stock.
Rubio’s board has hired Cowen and Co. as a financial advisor to continue evaluating strategic alternatives that could enhance stockholder value, including an evaluation of any “expressions of interest” received by the company.
About a year ago, Rubio’s received a buyout offer of $5 per share, or about $49.75 million, from private-equity firm Kelly Capital Investments LLC, an offer that also was rejected by the restaurant company.
For the first half of the year, Rubio’s net income totaled $757,000, or 8 cents per share, compared with a net loss of $410,000, or 4 cents per share, for the year-ago six-month period. Corporate revenues for the six months rose 9 percent to $95 million. The Carlsbad, Calif.-based company is scheduled to release third-quarter results on Nov. 4.
Contact Lisa Jennings at [email protected].