SAN DIEGO (CN) -Rubio’s board of directors and its largest shareholders are taking the company private on the cheap, at $8 a share, shareholders say in a Superior Court class action. They say the offer is unfair, as Rubio’s share price has tripled after five straight quarters of growth.
Lead plaintiff Sanjay Israni says “the timing of the proposed buyout is no accident.” After a dismal 2008, Rubio’s shares sank to about $2. But record results for the first half of 2009 brought a 9 percent increase in revenue, and the share rose to $6.
Rubio’s, founded in 1983, owns and operates 190 outlets in the Southwest.
The buyout group, which together own almost 50 percent of the shares, “saw the rapidly increasing share price as a threat to the leverage that the low share price afforded them and acted quickly to cap the price at $8,” the complaint states.
Defendant Alex Meruelo is the largest shareholder, with 12 percent of the shares. Ralph Rubio, founder and chairman, Kyle Anderson; managing director for Rosewood Capital; Daniel Pittard, Rubio’s president and CEO; and directors Timothy Ryan, Craig Andrews, William Bensyl, and Loren Pannier are all named as defendants.
The class alleges breach of fiduciary duties and seeks an injunction, costs and attorney’s fees.