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Luby's Days As A Public Company Are Numbered

|Includes: Luby's, Inc. (LUB)

I said it earlier, and although it might sound like a classic conspiracy theory, it seems more than plausible. The fact is, Luby's (NYSE:LUB) management did something very out of the ordinary a few months ago- they added four weeks to their first quarter earnings period. This occurrence also delayed the reporting of their first quarter report, an additional four weeks too.The reason why LUB management may of done this, was to procure more time to obtain the necessary financing to acquire the balance of the company they do not already own, hence taking the company private.

It would take them about $86 million to do so (assuming about a 15% premium, to motivate shareholders to sell) and the Pappas brothers could easily secure the loan based on the vast real estate holdings carried on Luby's balance sheet. They would have to tender for about 19 million shares to acquire 100% control of the company. In a few years, they could triple their money by placing an IPO, at three times the price. all they would have to do is get lean and mean, and raise their EBITDA to $60 million. Not hard at all, on a company that has a top line of $400 million

Disclosure: I am/we are long LUB.