Luby’s Inc. CEO Chris Pappas is looking at buying some assets of the cafeteria-Fuddruckers parent, which has announced plans to liquidate if shareholders approve.
Pappas and his brother, Harris Pappas, along with affiliated companies, own more than a third of shares in the Houston-based parent company to cafeterias, Fuddruckers and a contract foodservice division.
Chris Pappas filed Securities and Exchange Commission paperwork Sept. 18, saying he had been awarded access to “confidential information” on the company in order evaluate a possible deal.
Earlier in September, Luby’s board gave the go-ahead for a plan to liquidate the company’s assets, provided shareholders approve at a to-be-scheduled meeting. Luby’s had been seeking strategic alternatives, including a possible sale, for the past year.
SEC documents said Chris Pappas “in his individual capacity” executed the confidentiality agreement for company information.
The Pappas brothers and their Pappas Restaurants Inc., which owns such brands as Pappasito’s Cantina, Pappadeaux Seafood Kitchen and Pappas Bros. Steakhouse, have owned a stake in Luby’s since 2001.
Of 30.7 million shares on the market as of Aug. 26, Chris and Harris Pappas held 11.2 million personally and through Pappas Restaurants Inc.
Chris Pappas has served as CEO and president of the company since 2001. Harris Pappas served as chief operating officer until his retirement in April 2011 and continued as director until 2019.
Chris Pappas said the confidentiality agreement was issued on Sept. 11 and included no assurance of a possible transaction.
The Luby’s and Fuddruckers brands have struggled with sales over the past several years.
In the most recent Nation’s Restaurant News Top 200, Fuddruckers ranked No. 166 among brands in U.S. systemwide sales, falling to $217.6 million in the fiscal year ended August 2019 from $243.3 million in the preceding.
Similarly, Luby’s Cafeteria ranked No. 170 in U.S. systemwide sales, posting $209.2 million in the fiscal year ended August 2019, down from $226.1 million in the preceding year.
As of Jan. 21, Luby’s operated 118 restaurants nationally. The company also franchised 95 Fuddruckers, and its culinary contract services division provided foodservice management to 33 healthcare, corporate dining and sports stadium sites.
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