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Rubio's gets $49.7M buyout offer

CARLSBAD Calif. Rubio’s Restaurants Inc. has received a buyout offer of $5 per share, or $49.75 million, from private-equity firm and 5.9-percent stakeholder Kelly Capital Investments LLC, the company said Friday.

San Diego-based Kelly Capital sent a letter to Rubio’s chairman, Ralph Rubio, dated Oct. 15 that requested discussions on “a friendly transaction that retains key management and staff.”

The $5-per-share offer for all 9.95 million outstanding shares represented a 26-percent premium to Rubio’s stock closing price of $3.97 on Oct. 15. Since then, however, the company’s share price has risen nearly 8 percent to close at $4.28 on Friday, prior to the announcement of the buyout offer. The stock jumped on Friday after Rubio’s reported late Thursday that third quarter earnings were expected to beat Wall Street profit projections, which on average guided for 4 cents per share. A year ago, Rubio's earned 7 cents per share.

Kelly Capital’s Oct. 15 letter said the all-cash proposed offer is subject to financing and is not binding, pending due diligence and shareholder approval. The private-equity firm holds a 5.9-percent stake in Rubio’s, the operator or franchisor of about 180 Rubio’s Fresh Mexican Grills.

Rubio’s did not comment on the offer other than to say in a statement that the board of directors would “consider the letter consistent with its fiduciary duties.”

Earlier in the week, Rubio’s projected that its third quarter adjusted earnings before interest, tax, depreciation and amortization, or EBITDA, would exceed the $3.8 million reported in the third quarter last year. It cited cost controls as well improved, although still negative, same-store sales.

Latest-quarter same-store sales fell 2.1 percent, a sequential improvement from declines of 3.3 percent and 3.9 percent in the first and second quarters, respectively. Rubio’s officials also noted that same-store sales are positive through the first two weeks of the fourth quarter.

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