News

Rubio's passes on buyout offer

November 1, 2009

Rubio's Restaurants Inc. has decided to decline an$80 million buyout offerit received from stockholder Alex Meruelo and the Meruelo Group, and Levine Leichtman Capital Partners IV L.P., to acquire all of the company's outstanding common stock for $8 per share.

A special committee of the Rubio's board and its financial and legal advisors determined the proposal was not in the best interest of the company's stockholders, according to a statement released by the company.

The board has commenced a process to evaluate the company's strategic alternatives to enhance stockholder value. No timetable has been set for completion of the evaluation process; however, the board has engaged Cowen and Company LLC to provide financial advice and to assist the board with its evaluation process.

"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. 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," Dan Pittard, Rubio's president and CEO, said.

"Meanwhile, we believe we can continue to build stockholder value through our proactive response to the changing economy and advancing our winning strategy. We remain confident in our ability to continue this strategy while the Board evaluates the Company's strategic alternatives."

The company also has responded to a class-action lawsuit filed against it, its directors and officers, and Alex Meruelo in California Superior Court:

"The lawsuit inaccurately asserts that the company's officers and directors breached their fiduciary duties in connection with the company's receipt of an unsolicited proposal to acquire all of the company's outstanding common stock by a group consisting of Alex Meruelo and his affiliates and Levine Leichtman Capital Partners IV, L.P.

"The lawsuit seeks to enjoin the company and its directors and officers from consummating a sale of the company to the Meruelo Group. The company does not have, and has never had, an agreement or arrangement to sell any stock or assets to the Meruelo Group. Today, the company announced that its board of directors had rejected the unsolicited proposal from the Meruelo Group after unanimously determining that the proposal was not in the best interests of the company's stockholders. The company intends to vigorously defend against this meritless lawsuit."