The company estimates that distributions to shareholders would total $92MM to $123MM or $3.00 to $4.00 per share.
Stock price is currently $2.76. So at midpoint, there is 27% upside, but liquidations usually take ~3 years.
What are assets?
From Schedule 14A: “As of August 26, 2020, we owned 69 properties, consisting of the underlying land and buildings thereon, most of which operate, or have operated in the past, Luby’s Cafeterias and/or Fuddruckers operations. The estimated value of those properties as of August 26, 2020, was $191.5 million.”
Adding up assets and liabilities I get a value of $139.3MM or $4.55 per share.
Importantly, this doesn’t take into account:
Cash that will be burned or earned during distribution.
Any wind down costs. Riviera Resources estimates winddown costs of ~$32MM so they can be significant.
At first blush, management’s estimate of $3 to $4 in ultimate distributions sounds reasonable.
However, its going to take 2-3 years at a minimum to complete the liquidation so I don’t think it’s worth investing yet.
Recent reports indicate the CEO (Christopher Pappas) may make a bid for the entire company. This would be a positive but is hard to handicap.