-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CDCIMmbXcTqAIm9QIwXXDDjGqRX6pNM5+9CgH++Ef2uf60FYJJ9IJqDWItecuwFg jhE0+sU6oEpv62THXzz5OA== 0001193805-07-001929.txt : 20070730 0001193805-07-001929.hdr.sgml : 20070730 20070730090050 ACCESSION NUMBER: 0001193805-07-001929 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20070730 DATE AS OF CHANGE: 20070730 GROUP MEMBERS: C4S & CO., L.L.C. GROUP MEMBERS: JEFFREY M. SOLOMON GROUP MEMBERS: MORGAN B. STARK GROUP MEMBERS: PARCHE, LLC GROUP MEMBERS: PETER A. COHEN GROUP MEMBERS: RAMIUS CAPITAL GROUP, L.L.C. GROUP MEMBERS: RCG STARBOARD ADVISORS, LLC GROUP MEMBERS: STARBOARD VALUE AND OPPORTUNITY MASTER FUND LTD. GROUP MEMBERS: THOMAS W. STRAUSS SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: LUBYS INC CENTRAL INDEX KEY: 0000016099 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 741335253 STATE OF INCORPORATION: DE FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-10635 FILM NUMBER: 071008125 BUSINESS ADDRESS: STREET 1: 13111 NORTHWEST FREEWAY STREET 2: SUITE 600 CITY: HOUSTON STATE: TX ZIP: 77040 BUSINESS PHONE: (713) 329 6800 MAIL ADDRESS: STREET 1: 13111 NORTHWEST FREEWAY STREET 2: SUITE 600 CITY: HOUSTON STATE: TX ZIP: 77040 FORMER COMPANY: FORMER CONFORMED NAME: LUBYS CAFETERIAS INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: CAFETERIAS INC DATE OF NAME CHANGE: 19810126 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: RAMIUS CAPITAL GROUP LLC CENTRAL INDEX KEY: 0001050154 IRS NUMBER: 133937658 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 666 THIRD AVENUE STREET 2: 26TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2128457900 MAIL ADDRESS: STREET 1: 666 THIRD AVENUE STREET 2: 26TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10017 SC 13D 1 e602401_13d-ramiusluby.txt SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 -------------- SCHEDULE 13D (Rule 13d-101) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a) (Amendment No. )(1) Luby's, Inc. ------------ (Name of Issuer) Common Stock, par value $0.32 ----------------------------- (Title of Class of Securities) 549282101 --------- (CUSIP Number) STEVEN WOLOSKY, ESQ. OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP Park Avenue Tower 65 East 55th Street New York, New York 10022 (212) 451-2300 -------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) July 18, 2007 ------------- (Date of Event Which Requires Filing of This Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box |_|. Note. Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent. (Continued on following pages) (Page 1 of 22 Pages) - ---------- (1) The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). - ------------------- ------------------- CUSIP No. 549282101 13D Page 2 of 22 Pages - ------------------- ------------------- ================================================================================ 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) PARCHE, LLC - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |X| (b) |_| - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OF 2(e) |_| - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 271,200 ----------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY - 0 - OWNED BY ----------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON 271,200 WITH ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER - 0 - - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 271,200 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_| - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.0% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON OO ================================================================================ *SEE INSTRUCTIONS BEFORE FILLING OUT! - ------------------- ------------------- CUSIP No. 549282101 13D Page 3 of 22 Pages - ------------------- ------------------- ================================================================================ 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) STARBOARD VALUE AND OPPORTUNITY MASTER FUND LTD. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |X| (b) |_| - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OF 2(e) |_| - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 1,423,800 ----------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY - 0 - OWNED BY ----------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON 1,423,800 WITH ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER - 0 - - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,423,800 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_| - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.4% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON CO ================================================================================ *SEE INSTRUCTIONS BEFORE FILLING OUT! - ------------------- ------------------- CUSIP No. 549282101 13D Page 4 of 22 Pages - ------------------- ------------------- ================================================================================ 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) RCG STARBOARD ADVISORS, LLC - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |X| (b) |_| - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OF 2(e) |_| - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 1,695,000 ----------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY - 0 - OWNED BY ----------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON 1,695,000 WITH ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER - 0 - - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,695,000 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_| - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.5% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IA, OO ================================================================================ *SEE INSTRUCTIONS BEFORE FILLING OUT! - ------------------- ------------------- CUSIP No. 549282101 13D Page 5 of 22 Pages - ------------------- ------------------- ================================================================================ 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) RAMIUS CAPITAL GROUP, L.L.C. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |X| (b) |_| - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OF 2(e) |_| - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 1,695,000 ----------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY - 0 - OWNED BY ----------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON 1,695,000 WITH ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER - 0 - - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,695,000 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_| - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.5% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IA, OO ================================================================================ *SEE INSTRUCTIONS BEFORE FILLING OUT! - ------------------- ------------------- CUSIP No. 549282101 13D Page 6 of 22 Pages - ------------------- ------------------- ================================================================================ 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) C4S & CO., L.L.C. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |X| (b) |_| - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OF 2(e) |_| - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 1,695,000 ----------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY - 0 - OWNED BY ----------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON 1,695,000 WITH ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER - 0 - - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,695,000 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_| - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.5% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON OO ================================================================================ *SEE INSTRUCTIONS BEFORE FILLING OUT! - ------------------- ------------------- CUSIP No. 549282101 13D Page 7 of 22 Pages - ------------------- ------------------- ================================================================================ 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) PETER A. COHEN - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |X| (b) |_| - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OF 2(e) |_| - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION USA - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER -0- ----------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 1,695,000 OWNED BY ----------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON -0- WITH ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 1,695,000 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,695,000 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_| - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.5% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IN ================================================================================ *SEE INSTRUCTIONS BEFORE FILLING OUT! - ------------------- ------------------- CUSIP No. 549282101 13D Page 8 of 22 Pages - ------------------- ------------------- ================================================================================ 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) MORGAN B. STARK - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |X| (b) |_| - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OF 2(e) |_| - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION USA - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER -0- ----------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 1,695,000 OWNED BY ----------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON -0- WITH ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 1,695,000 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,695,000 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_| - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.5% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IN ================================================================================ *SEE INSTRUCTIONS BEFORE FILLING OUT! - ------------------- ------------------- CUSIP No. 549282101 13D Page 9 of 22 Pages - ------------------- ------------------- ================================================================================ 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) JEFFREY M. SOLOMON - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |X| (b) |_| - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OF 2(e) |_| - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION USA - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER -0- ----------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 1,695,000 OWNED BY ----------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON -0- WITH ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 1,695,000 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,695,000 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_| - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.5% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IN ================================================================================ *SEE INSTRUCTIONS BEFORE FILLING OUT! - ------------------- ------------------- CUSIP No. 549282101 13D Page 10 of 22 Pages - ------------------- ------------------- ================================================================================ 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) THOMAS W. STRAUSS - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |X| (b) |_| - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OF 2(e) |_| - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION USA - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER -0- ----------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 1,695,000 OWNED BY ----------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON -0- WITH ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 1,695,000 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,695,000 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_| - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.5% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IN ================================================================================ *SEE INSTRUCTIONS BEFORE FILLING OUT! - ------------------- ------------------- CUSIP No. 549282101 13D Page 11 of 22 Pages - ------------------- ------------------- The following constitutes the Schedule 13D filed by the undersigned (the "Schedule 13D"). Item 1. Security and Issuer. This statement relates to shares of the Common Stock, par value $.32 per share (the "Shares"), of Luby's, Inc. (the "Issuer"). The address of the principal executive offices of the Issuer is 13111 Northwest Freeway Suite 600, Houston, Texas 77040. Item 2. Identity and Background. (a) This statement is filed by: (i) Parche, LLC, a Delaware limited liability company ("Parche"), with respect to the Shares directly and beneficially owned by it; (ii) Starboard Value and Opportunity Master Fund Ltd., a Cayman Islands exempted company ("Starboard"), with respect to the Shares directly and beneficially owned by it; (iii) RCG Starboard Advisors, LLC, a Delaware limited liability company ("RCG Starboard Advisors"), which serves as the investment manager of Starboard and the managing member of Parche; (iv) Ramius Capital Group, L.L.C., a Delaware limited liability company ("Ramius Capital"), which serves as the sole member of RCG Starboard Advisors; (v) C4S & Co., L.L.C., a Delaware limited liability company ("C4S"), which serves as managing member of Ramius Capital; (vi) Peter A. Cohen ("Mr. Cohen"), who serves as one of the managing members of C4S; (vii) Morgan B. Stark ("Mr. Stark"), who serves as one of the managing members of C4S; (viii) Thomas W. Strauss ("Mr. Strauss"), who serves as one of the managing members of C4S; and (ix) Jeffrey M. Solomon ("Mr. Solomon"), who serves as one of the managing members of C4S; Each of the foregoing is referred to as a "Reporting Person" and collectively as the "Reporting Persons." Each of the Reporting Persons is party to that certain Joint Filing Agreement, as further described in Item 6. Accordingly, the Reporting Persons are hereby filing a joint Schedule 13D. - ------------------- ------------------- CUSIP No. 549282101 13D Page 12 of 22 Pages - ------------------- ------------------- (b) The address of the principal office of each of Parche, RCG Starboard Advisors, Ramius Capital, C4S, Mr. Cohen, Mr. Stark, Mr. Strauss and Mr. Solomon is 666 Third Avenue, 26th Floor, New York, New York 10017. The address of the principal office of Starboard is c/o Citco Fund Services (Cayman Islands) Limited, Corporate Center, West Bay Road, Grand Cayman, Cayman Islands, British West Indies. The officers and directors of Starboard and their principal occupations and business addresses are set forth on Schedule B and incorporated by reference in this Item 2. (c) The principal business of each of Starboard and Parche is serving as a private investment fund. Each of Starboard and Parche has been formed for the purpose of making equity investments and, on occasion, taking an active role in the management of portfolio companies in order to enhance shareholder value. The principal business of RCG Starboard Advisors is acting as the investment manager of Starboard and the managing member of Parche. Ramius Capital is engaged in money management and investment advisory services for third parties and proprietary accounts. C4S serves as managing member of Ramius Capital. Mr. Cohen, Mr. Strauss, Mr. Stark and Mr. Solomon serve as co-managing members of C4S. (d) No Reporting Person has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) No Reporting Person has, during the last five years, been party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) Messrs. Cohen, Stark, Strauss, and Solomon are citizens of the United States of America. Item 3. Source and Amount of Funds or Other Consideration. The Shares purchased by Parche and Starboard were purchased with the working capital of such entities (which may, at any given time, include margin loans made by brokerage firms in the ordinary course of business) in open market purchases. The aggregate purchase cost of the 1,695,000 Shares beneficially owned in the aggregate by the Reporting Persons is approximately $16,452,757.00, including brokerage commissions. Certain of the Shares reported in the Statement as owned by Parche were acquired in private transactions with various transferors for which Ramius Capital or an affiliate serves as the investment manager, the managing member or the managing member of the investment manager. Ramius Capital is the sole member of RCG Starboard Advisors, which is the managing member of Parche. Parche acquired from such transferors an aggregate of 204,000 Shares on July 18, 2007 at a per Share price of $9.5000, equal to the last reported sales price on the New York Stock Exchange on the date the transaction was completed, or an aggregate of $1,938,000. The total of 204,000 Shares transferred to Parche were initially acquired by the transferors for an aggregate of approximately - ------------------- ------------------- CUSIP No. 549282101 13D Page 13 of 22 Pages - ------------------- ------------------- $2,006,872.00 (excluding commissions and other execution related costs). Such transferors had, within the 60 days prior to the filing of the Statement, effected the following transactions in the Shares: 06/05/07 purchased 8,000 Shares at a price per Share of $9.5079; 06/06/07 purchased 4,624 Shares at a price per Share of $9.6487; 06/07/07 purchased 6,800 Shares at a price per Share of $9.5236; 06/08/07 purchased 3,712 Shares at a price per Share of $9.7220; 06/11/07 purchased 8,864 Shares at a price per Share of $10.0007; 06/12/07 purchased 18,752 Shares at a price per Share of $9.3706; 06/13/07 purchased 1,728 Shares at a price per Share of $9.4426; 06/14/07 purchased 7,840 Shares at a price per Share of $9.4707; 06/15/07 purchased 5,440 Shares at a price per Share of $9.4944; 06/18/07 purchased 1,264 Shares at a price per Share of $9.4914; 06/20/07 purchased 8,528 Shares at a price per Share of $9.4957; 06/21/07 purchased 4,800 Shares at a price per Share of $9.4830; 06/26/07 purchased 10,048 Shares at a price per Share of $9.9061; 06/28/07 purchased 6,112 Shares at a price per Share of $9.9792; 06/29/07 purchased 3,488 Shares at a price per Share of $10.0020; and 07/18/07 sold 204,000 Shares at a price per Share of $9.5000. All purchases of Shares referenced above were funded by working capital, which may, at any given time, include margin loans made by brokerage firms in the ordinary course of business. The Reporting Persons do not believe that the information contained in this paragraph is called for by the Items of Schedule 13D and are disclosing it for supplemental informational purposes only. Item 4. Purpose of Transaction. The Reporting Persons purchased the Shares based on the Reporting Persons' belief that the Shares, when purchased, were undervalued and represented an attractive investment opportunity. Depending upon overall market conditions, other investment opportunities available to the Reporting Persons, and the availability of Shares at prices that would make the purchase of additional Shares desirable, the Reporting Persons may endeavor to increase their position in the Issuer through, among other things, the purchase of Shares on the open market or in private transactions or otherwise, on such terms and at such times as the Reporting Persons may deem advisable. On July 30, 2007, RCG Starboard Advisors delivered a letter to the President and Chief Executive Officer and Board of Directors of the Issuer expressing its belief that the Issuer's Shares are undervalued. The letter urged the Company to promptly take the appropriate steps to unlock intrinsic value by engaging a strategic advisor to assist the Issuer in either (i) executing a sale leaseback on a substantial portion of its owned real estate with a coincident stock buyback and special dividend or (ii) pursuing a sale of the Company for an appropriate premium. The letter is attached hereto as Exhibit 99.3 and is incorporated herein by reference. No Reporting Person has any present plan or proposal which would relate to or result in any of the matters set forth in subparagraphs (a) - (j) of Item 4 of Schedule 13D except as set forth herein or such as would occur upon completion of any of the actions discussed above. The Reporting Persons intend to review their investment in the Issuer on a continuing basis and engage in discussions with management and the Board of Directors of the Issuer concerning the business, operations and future plans of the Issuer. Depending on various factors including, without limitation, the Issuer's financial position and investment strategy, the price levels of the Shares, conditions in the securities markets and general economic and industry conditions, the Reporting Persons may in the future take such actions with respect to their investment in - ------------------- ------------------- CUSIP No. 549282101 13D Page 14 of 22 Pages - ------------------- ------------------- the Issuer as they deem appropriate including, without limitation, seeking Board representation, making proposals to the Issuer concerning changes to the capitalization, ownership structure or operations of the Issuer, purchasing additional Shares, selling some or all of their Shares, engaging in short selling of or any hedging or similar transaction with respect to the Shares or changing their intention with respect to any and all matters referred to in Item 4. Item 5. Interest in Securities of the Issuer. The aggregate percentage of Shares reported owned by each person named herein is based upon 26,153,799 Shares outstanding, as of June 11, 2007, which is the total number of Shares outstanding as reported in the Issuer's Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on June 15, 2007. A. Parche (a) As of the date of this filing, Parche beneficially owns 271,200 Shares. Percentage: 1.0% as of the date hereof. (b) 1. Sole power to vote or direct vote: 271,200 2. Shared power to vote or direct vote: 0 3. Sole power to dispose or direct the disposition: 271,200 4. Shared power to dispose or direct the disposition: 0 (c) The transactions in the Shares by Parche during the past 60 days are set forth in Schedule A and are incorporated by reference. All transactions were effected in the open market, except as otherwise noted. B. Starboard (a) As of the date of this filing, Starboard beneficially owns 1,423,800 Shares. Percentage: 5.4% as of the date hereof. (b) 1. Sole power to vote or direct vote: 1,423,800 2. Shared power to vote or direct vote: 0 3. Sole power to dispose or direct the disposition: 1,423,800 4. Shared power to dispose or direct the disposition: 0 (c) The transactions in the Shares by Starboard during the past 60 days are set forth in Schedule A and are incorporated by reference. All transactions were effected in the open market, except as otherwise noted. C. RCG Starboard Advisors (a) As of the date of this filing, as managing member of Parche and the investment manager of Starboard, RCG Starboard Advisors may be deemed the beneficial owner of (i) 271,200 Shares owned by Parche and (ii) 1,423,800 Shares owned by Starboard. - ------------------- ------------------- CUSIP No. 549282101 13D Page 15 of 22 Pages - ------------------- ------------------- Percentage: 6.5% as of the date hereof. (b) 1. Sole power to vote or direct vote: 1,695,000 2. Shared power to vote or direct vote: 0 3. Sole power to dispose or direct the disposition: 1,695,000 4. Shared power to dispose or direct the disposition: 0 (c) RCG Starboard Advisors did not enter into any transactions in the Shares during the past 60 days. The transactions in the Shares during the past 60 days on behalf of Parche and Starboard are set forth in Schedule A and are incorporated by reference. All transactions were effected in the open market, except as otherwise noted. D. Ramius Capital (a) As of the date of this filing, as the sole member of RCG Starboard Advisors Ramius Capital may be deemed the beneficial owner of (i) 271,200 Shares owned by Parche and (ii) 1,423,800 Shares owned by Starboard. Percentage: 6.5% as of the date hereof. (b) 1. Sole power to vote or direct vote: 1,695,000 2. Shared power to vote or direct vote: 0 3. Sole power to dispose or direct the disposition: 1,695,000 4. Shared power to dispose or direct the disposition: 0 (c) Ramius Capital did not enter into any transactions in the Shares during the past 60 days. The transactions in the Shares during the past 60 days on behalf of Parche and Starboard are set forth in Schedule A and are incorporated by reference. All transactions were effected in the open market, except as otherwise noted. E. C4S (a) As of the date of this filing, as the managing member of Ramius Capital, C4S may be deemed the beneficial owner of (i) 271,200 Shares owned by Parche and (ii) 1,423,800 Shares owned by Starboard. Percentage: 6.5% as of the date hereof. (b) 1. Sole power to vote or direct vote: 1,695,000 2. Shared power to vote or direct vote: 0 3. Sole power to dispose or direct the disposition: 1,695,000 4. Shared power to dispose or direct the disposition: 0 (c) C4S did not enter into any transactions in the Shares during the past 60 days. The transactions in the Shares during the past 60 days on behalf of Parche and Starboard are set forth in Schedule A and are incorporated by reference. All transactions were effected in the open market, except as otherwise noted. - ------------------- ------------------- CUSIP No. 549282101 13D Page 16 of 22 Pages - ------------------- ------------------- F. Mr. Cohen, Mr. Stark, Mr. Strauss and Mr. Solomon (a) As of the date of this filing, as the managing members of C4S, each of Mr. Cohen, Mr. Stark, Mr. Strauss and Mr. Solomon may be deemed the beneficial owner of (i) 271,200 Shares owned by Parche and (ii) 1,423,800 Shares owned by Starboard. Percentage: 6.5% as of the date hereof. (b) 1. Sole power to vote or direct vote: 0 2. Shared power to vote or direct vote: 1,695,000 3. Sole power to dispose or direct the disposition: 0 4. Shared power to dispose or direct the disposition: 1,695,000 (c) None of Mr. Cohen, Mr. Stark, Mr. Strauss or Mr. Solomon has entered into any transactions in the Shares during the past 60 days. The transactions in the Shares during the past 60 days on behalf of Parche and Starboard are set forth in Schedule A and are incorporated by reference. All transactions were effected in the open market, except as otherwise noted. (d) No person other than the Reporting Persons is known to have the right to receive, or the power to direct the receipt of dividends from, or proceeds from the sale of, such shares of the Common Stock. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer. On July 30, 2007, Starboard, Parche, RCG Starboard Advisors, Ramius Capital, C4S, Mr. Cohen, Mr. Solomon, Mr. Stark and Mr. Strauss (collectively, the "Group") entered into a Joint Filing Agreement (the "Joint Filing Agreement") in which the parties agreed to the joint filing on behalf of each of them of statements on Schedule 13D with respect to the securities of the Issuer to the extent required by applicable law. The Joint Filing Agreement is attached as Exhibit 99.1 hereto and is incorporated herein by reference. Other than as described herein, there are no contracts, arrangements, understandings or relationships among the Reporting Persons, or between the Reporting Persons and any other person, with respect to the securities of the Issuer. - ------------------- ------------------- CUSIP No. 549282101 13D Page 17 of 22 Pages - ------------------- ------------------- Item 7. Material to be Filed as Exhibits. 99.1 Joint Filing Agreement by and among Parche, Starboard, RCG Starboard Advisors, Ramius Capital, C4S, Mr. Cohen, Mr. Solomon, Mr. Stark and Mr. Strauss, dated July 30, 2007. 99.2 Power of Attorney for Peter A. Cohen, Morgan B. Stark, Thomas W. Strauss and Jeffrey M. Solomon, dated March 11, 2005. 99.3 Letter from RCG Starboard Advisors to the President and Chief Executive Officer and Board of Directors of the Issuer, dated July 30, 2007. - ------------------- ------------------- CUSIP No. 549282101 13D Page 18 of 22 Pages - ------------------- ------------------- SIGNATURES After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct. Dated: July 30, 2007 PARCHE, LLC RCG STARBOARD ADVISORS, LLC By: RCG Starboard Advisors, LLC, its By: Ramius Capital Group, L.L.C., managing member its sole member STARBOARD VALUE AND RAMIUS CAPITAL GROUP, L.L.C. OPPORTUNITY MASTER FUND LTD. By: C4S & Co., L.L.C., as managing member By: RCG Starboard Advisors, LLC, its investment manager C4S & CO., L.L.C. By: /s/ Jeffrey M. Solomon -------------------------- Name: Jeffrey M. Solomon Title: Authorized Signatory /s/ Jeffrey M. Solomon - ---------------------------------------- JEFFREY M. SOLOMON Individually and as attorney-in-fact for Peter A. Cohen, Morgan B. Stark and Thomas W. Strauss - ------------------- ------------------- CUSIP No. 549282101 13D Page 19 of 22 Pages - ------------------- ------------------- SCHEDULE A Transactions in the Shares During the Past 60 Days
Shares of Common Stock Price Per Date of Purchased / (Sold) Share($) Purchase / Sale ------------------ -------- --------------- PARCHE, LLC ----------- 204,000* 9.5000 07/18/07 6,656 9.4036 07/18/07 24,000 9.4561 07/18/07 17,264 9.4997 07/19/07 144 9.4961 07/19/07 6,160 9.4968 07/20/07 1,872 9.4920 07/20/07 240 9.4740 07/23/07 10,864 9.4936 07/24/07 STARBOARD VALUE AND OPPORTUNITY MASTER FUND LTD. ------------------------------------------------ 42,000 9.5079 06/05/07 24,276 9.6487 06/06/07 35,700 9.5236 06/07/07 19,488 9.7220 06/08/07 46,536 10.0007 06/11/07 98,448 9.3706 06/12/07 9,072 9.4426 06/13/07 41,160 9.4707 06/14/07 28,560 9.4944 06/15/07 6,636 9.4914 06/18/07 44,772 9.4957 06/20/07 25,200 9.4830 06/21/07 52,752 9.9061 06/26/07
- ------------------- ------------------- CUSIP No. 549282101 13D Page 20 of 22 Pages - ------------------- ------------------- 32,088 9.9792 06/28/07 18,312 10.0020 06/29/07 34,944 9.4036 07/18/07 126,000 9.4561 07/18/07 90,636 9.4997 07/19/07 756 9.4961 07/19/07 32,340 9.4968 07/20/07 9,828 9.4920 07/20/07 1,260 9.4740 07/23/07 57,036 9.4936 07/24/07
- ---------- * Shares were acquired in private transactions with various transferors for which Ramius Capital Group, L.L.C. or an affiliate serves as the investment manager, the managing member or the managing member of the investment manager. - ------------------- ------------------- CUSIP No. 549282101 13D Page 21 of 22 Pages - ------------------- ------------------- SCHEDULE B Directors and Officers of Starboard Value and Opportunity Master Fund Ltd.
Name and Position Principal Occupation Principal Business Address - ----------------- -------------------- -------------------------- Mark Mitchell Partner of Ramius Capital Group, L.L.C. 666 Third Avenue Director 26th Floor New York, New York 10017 Jeffrey M. Solomon Managing Member of C4S & Co., L.L.C., 666 Third Avenue Director which is the Managing Member of Ramius 26th Floor Capital Group, L.L.C. New York, New York 10017 CFS Company Ltd. Nominee Company registered with Cayman c/o Citco Fund Services (Cayman Director Islands Monetary Authority and is Islands) Limited affiliated with Administrator of the Corporate Center Fund West Bay Road Grand Cayman, Cayman Islands British West Indies CSS Corporation Ltd. Affiliate of the Administrator of the c/o Citco Fund Services (Cayman Secretary Fund Islands) Limited Corporate Center West Bay Road Grand Cayman, Cayman Islands British West Indies
EXHIBIT INDEX
Exhibit Exhibit Number ------- -------------- 1. Joint Filing Agreement by and among Parche, Starboard RCG Starboard Advisors, Ramius Capital, C4S, Mr. Cohen, Mr. Solomon, Mr. Stark and Mr. Strauss, dated July 30, 2007. 99.1 2. Power of Attorney for Peter A. Cohen, Morgan B. Stark, Thomas W. Strauss and Jeffrey M. Solomon, dated March 11, 2005. 99.2 3. Letter from RCG Starboard Advisors to the President and Chief Executive 99.3 Officer and Board of Directors of the Issuer, dated July 30, 2007.
EX-99.1 2 e602401_ex99-1.txt JOINT FILING AGREEMENT EXHIBIT 99.1 JOINT FILING AGREEMENT In accordance with Rule 13d-1(k)(1)(iii) under the Securities Exchange Act of 1934, as amended, the persons named below agree to the joint filing on behalf of each of them of a Statement on Schedule 13D filed on July 30, 2007 (including amendments thereto) with respect to the Common Stock of Luby's, Inc. This Joint Filing Agreement shall be filed as an Exhibit to such Statement. Dated: July 30, 2007 PARCHE, LLC RCG STARBOARD ADVISORS, LLC By: RCG Starboard Advisors, LLC, its By: Ramius Capital Group, L.L.C., managing member its sole member STARBOARD VALUE AND RAMIUS CAPITAL GROUP, L.L.C. OPPORTUNITY MASTER FUND LTD. By: C4S & Co., L.L.C., as managing member By: RCG Starboard Advisors, LLC, its investment manager C4S & CO., L.L.C. By: /s/ Jeffrey M. Solomon -------------------------- Name: Jeffrey M. Solomon Title: Authorized Signatory /s/ Jeffrey M. Solomon - ---------------------------------------- JEFFREY M. SOLOMON Individually and as attorney-in-fact for Peter A. Cohen, Morgan B. Stark and Thomas W. Strauss EX-99.2 3 e602401_ex99-2.txt POWER OF ATTORNEY EXHIBIT 99.2 POWER OF ATTORNEY The undersigned hereby appoints Peter A. Cohen, Morgan B. Stark, Thomas W. Strauss and Jeffrey M. Solomon, or any of them, his true and lawful attorney-in fact and agent to execute and file with the Securities and Exchange Commission any Schedule 13D, Schedule 13G, any amendments thereto and any related documentation which may be required to be filed in his individual capacity as a result of the undersigned's beneficial ownership of, or participation in a group with respect to, securities directly or indirectly beneficially owned by Ramius Capital Group, LLC or any of its affiliates, and granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing which he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof. The authority of Peter A. Cohen, Morgan B. Stark, Thomas W. Strauss and Jeffrey M. Solomon, or any of them, under this Power of Attorney shall continue with respect to the undersigned until the undersigned is no longer required to file Schedule 13Ds or Schedule 13Gs unless revoked earlier in writing. Date: March 11, 2005 /s/ Peter A. Cohen --------------------------------------- Peter A. Cohen /s/ Morgan B. Stark --------------------------------------- Morgan B. Stark /s/ Jeffrey M. Solomon --------------------------------------- Jeffrey M. Solomon /s/ Thomas W. Strauss --------------------------------------- Thomas W. Strauss EX-99.3 4 e602401_ex99-3.txt LETTER FROM RCG [LOGO] RCG STARBOARD ADVISORS, LLC July 30, 2007 Christopher Pappas Luby's, Inc. President, Director and CEO 13111 Northwest Freeway Suite 600 Houston, Texas 77040 cc: Board of Directors Dear Christopher, RCG Starboard Advisors, LLC, a subsidiary of Ramius Capital Group, L.L.C., together with its affiliates, currently own approximately 6.5% of Luby's, Inc. ("Luby's" or "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. While we applaud the improvement in restaurant operations over the past six years, we believe a significant amount of untapped value resides in Luby's real estate holdings. Over the past few months we have made several attempts to meet with you and the rest of Luby's management team to discuss our ideas for enhancing shareholder value, but Company representatives have repeatedly informed us that members of management are too busy to meet with us. Therein lies one of our chief concerns with Luby's corporate practices. As shareholders of Luby's, we are extremely concerned that the time commitment associated with running the Pappas restaurant entities, which are privately owned by you and your brother Harris, is preventing Luby's management from taking the steps necessary to unlock value at Luby's. While we are sympathetic to the difficulty of managing both businesses, the shareholders of Luby's are not interested in the Pappas restaurant chain. We are interested in Luby's. As a public company, management has a fiduciary responsibility to work with the Board of Directors to maximize value for all shareholders. With the value of Luby's real estate, potentially exceeding its current enterprise value, we believe value can be maximized in one of two ways: 1) execute a sale leaseback on a substantial portion of the owned real estate with a coincident stock buyback and special dividend or 2) sell the Company for a price that reflects the full value of the Luby's concept and the associated real estate in order to maximize risk adjusted returns for shareholders. Given the available sources of financing, we believe a private equity firm could purchase Luby's at the current market price with little or no equity consideration. Also, when considering the value of the Luby's concept and related cash flow, we believe the business could attract a significant premium in a competitive sale process. [LOGO] RCG STARBOARD ADVISORS, LLC After conversations with several real estate and sale leaseback experts, we believe that Luby's real estate is worth between $206 million and $265 million pre-tax in a sale leaseback transaction. This represents between 91% and 117% of the Company's current enterprise value. ================================================================================ ($ in millions) Sale Leaseback Transaction Low High ======================================================== ======= ======= Owned Properties 93.0 93.0 Average Revenue per Property 2.52 2.52 ------- ------- Estimated Revenue on Owned Properties $ 234.0 $ 234.0 Estimated Rent Expense 7.5% 8.5% ------- ------- Rent Payed $ 17.5 $ 19.9 Cap Rate 8.5% 7.5% ------- ------- Real Estate Value $ 206.5 $ 265.2 Shares Outstanding 26.2 26.2 ================================================================================ Real Estate Value per Share $ 7.89 $ 10.14 ================================================================================ - -------------------------------------------------------------------------------- Source: Estimates based on RCG Starboard internal projections. We believe Luby's stock price of $9.66 per share as of July 27th, ascribes little to no value to the Company's real estate. Additionally, the current price does not, in our view, fully value the cash flow or growth strategy of Luby's as is evidenced by the 6.8x multiple of latest twelve months ("LTM") EBITDA. Upon executing a sale leaseback transaction, we estimate that Luby's will have net cash after taxes of between $208 million and $244 million. We believe that the Company should use between $100 million and $150 million in cash to do a large buyback and pay a substantial one-time dividend. We believe the remaining cash from the sale leaseback transaction and the Company's significant debt capacity should then be used to fund management's recently disclosed restaurant expansion strategy. We believe this strategy will create the most value for shareholders and will leave the Company with sufficient cash to grow. Assuming the Company is able to repurchase shares in a Dutch auction tender offer at a 20% premium to the current market price, this buyback would retire approximately 33% to 49% of the current shares outstanding. After completing the sale leaseback transaction, stock buyback, and special one-time dividend, we believe Luby's stock could trade at a valuation more in line with comparable public companies. Based on analyst next twelve months ("NTM") consensus EBITDA estimates of $37.9 million, and assuming the Company pays between $17.5 million and $19.9 million of market rent post sale leaseback, Luby's pro-forma NTM EBITDA would be between $20.4 million and $18.0 million. Although we believe there is no justification for the discount currently ascribed to Luby's shares, using a 10% discount on the high end of the comps below and the current NTM EBITDA multiple on the low end, Luby's could trade for between 6.0x and 6.2x NTM EBITDA. [LOGO] RCG STARBOARD ADVISORS, LLC
========================================================================================================================= COMPARABLE STATISTICS ($ in millions) Market Enterprise EBITDA Enterprise Value / EBITDA LTM EBITDA NTM* Rev Company Name Cap Value LTM NTM* LTM NTM* Margin Growth - ------------ --- ----- --- ---- --- ---- ------ ------ Darden Restaurants $5,952.0 $6,624.8 $ 805.3 $ 817.6 8.2x 8.1x 14.5% 6.0% Brinker International 3,061.7 3,582.9 564.3 537.5 6.3x 6.7x 13.1% 5.8% Bob Evans Farms Inc. 1,083.1 1,260.2 178.8 181.3 7.0x 7.0x 10.8% 5.8% CBRL Group Inc. 951.5 1,644.9 278.3 242.1 5.9x 6.8x 10.3% (9.8%) O'Charley's 428.0 567.2 94.3 109.4 6.0x 5.2x 9.5% 4.6% Denny's Corp. 384.1 796.2 120.7 104.6 6.6x 7.6x 12.3% (7.1%) - ------------------------------------------------------------------------------------------------------------------------ Average 6.7x 6.9x 11.7% 0.9% ======================================================================================================================== Luby's, Inc. 252.6 227.1 $ 33.5 $ 37.9 6.8x 6.0x 10.4% 2.0%
* Estimates per Capital IQ, as of July 27, 2007 and RCG Starboard internal estimates. Source: Market data per Bloomberg and Capital IQ as of July 27, 2007. Luby's, Inc. NTM EBITDA estimate is fiscal year 2008 estimate. With the execution of the aforementioned changes, our analysis below demonstrates that Luby's shares could be valued in a range of $13.11 per share to $15.57 per share. This represents between a 36% and 61% increase from the current stock price. [LOGO] RCG STARBOARD ADVISORS, LLC ================================================================================ ($ in millions) Step 1: Sale Leaseback Transaction: Low High =================================== ======= ======= Real Estate Value $ 206.5 $ 265.2 Estimated Taxes @38% (a) (24.4) (46.7) ------- ------- After Tax Real Estate Value $ 182.1 $ 218.5 Net Cash on Balance Sheet 25.5 25.5 ------- ------- Net Cash after Sale Lease Back $ 207.6 $ 244.0 Step 2: Stock Buyback: =================================== Current Stock Price $ 9.66 $ 9.66 Buyback Premium 20.0% 20.0% ------- ------- Stock Price for Buyback $ 11.59 $ 11.59 Cash Used for Buyback $ 100.0 $ 150.0 Shares Acquired During Buyback 8.63 12.94 Remaining Shares After Buyback 17.53 13.21 Step 3: Special One Time Dividend: =================================== Value of Dividend $ 42.6 $ 29.0 Step 4: Company Valuation: =================================== Consensus NTM EBITDA (b) $ 37.9 $ 37.9 Market Rent from Sale Lease Back (17.5) (19.9) ------- ------- Pro Forma NTM EBITDA $ 20.4 $ 18.0 NTM EV / EBITDA Valuation Multiple 6.0x 6.2x ------- ------- Implied Enterprise Value $ 122.1 $ 111.7 Net Cash After Buyback 65.0 65.0 ------- ------- Implied Market Cap $ 187.1 $ 176.7 Pro Forma Shares Outstanding 17.53 13.21 Implied Stock Price $ 10.67 $ 13.37 ================================================================================ Implied Stock Price Including Dividend $ 13.11 $ 15.57 ================================================================================ - -------------------------------------------------------------------------------- Source: Estimates based on RCG STARBOARD internal projections. (a): Tax Base estimated by adding the land at book value and the buildings as a % of net PP&E from 10Q filed on June 15, 2007. (b): NTM EBITDA estimate is fiscal year 2008 estimate. While we believe a sale lease back transaction and the distribution of capital can unlock significant shareholder value, the value of the Company's shares could continue to trade below their intrinsic value as long as there is perceived management conflict or distraction. We are concerned that significant potential conflicts of interest and time commitment issues exist for certain members of management and directors of Luby's who are also employed by, or otherwise affiliated with, your Pappas restaurant entities. This does not represent good corporate governance. While you may be able to manage through [LOGO] RCG STARBOARD ADVISORS, LLC your conflicts of interest, we believe it is imperative for you to surround yourself with a wholly disinterested Board and management team that can render independent judgment and ensure that any future potential conflicts of interest between Luby's and Pappas restaurants are evaluated with the best interests of all of the Company's shareholders in mind. We note below just a few of the current time commitment issues and potential conflicts of interest for certain members of Luby's management team and Board: o Frank Markantonis, a member of Luby's Board, has served as an attorney for many years for the Pappas restaurant entities and his principal client throughout his legal career has been Pappas Restaurants, Inc. o Mr. Markantonis' step-son, Peter Tropoli, serves as a Senior Vice President, General Counsel and Secretary for Luby's and has provided legal services to the Pappas restaurant entities. o Luby's current financial and accounting advisor and former Chief Financial Officer, Ernest Pekmezaris, also serves as the Treasurer of Pappas Restaurants, Inc. o Additionally, we note that the new Chief Financial Officer, Scott Gray, served as Internal Auditor at Pappas restaurants prior to joining the Company in 2001. It is unclear whether he retains any current conflict. We firmly believe in the value of Luby's. Management and the Board cannot just accept the current state because of past accomplishments but rather are duty bound to maximize value for shareholders today. We strongly urge you to take prompt action to unlock the inherent value of the Company's real estate holdings to highlight the strong free cash flow generation ability of the Luby's franchise, while improving corporate governance and minimizing conflicts. The Board should immediately engage a strategic advisor to assist the Company in either a sale leaseback transaction or a sale of the Company. There is a significant opportunity to unlock value at Luby's. We look forward to working with senior management and the Board to meet that objective. Best Regards, /s/ Jeffrey C. Smith Jeffrey C. Smith Partner Ramius Capital Group -----END PRIVACY-ENHANCED MESSAGE-----