Tubby's Announces New Proposed Merger With Private Corporation

STERLING HEIGHTS, MICHIGAN (Wednesday, May 05, 1999) - Tubby's, Inc. announced that Interfoods of America, Inc., Miami-based Popeye's Chicken franchisee, has unilaterally declared that it will not proceed with the proposed merger announced by both companies on December 16, 1998. Tubby's now faces imminent delisting from the NASDAQ Stock Market because of its inability to meet the amended qualifications for continued listing. Quotations of Tubby's shares will no longer be listed on the NasdaqSmallCap market; instead, they will be listed on the OTCBB.
In response to this turn of events, Tubby's announced a new proposed merger between it and a private Michigan corporation, R Corp., whose shareholders include certain members of Tubby's current management. Pursuant to this proposed merger, all of the shareholders of Tubby's, other than shareholders who are also shareholders of R Corp., will receive cash in lieu of shares in the surviving corporation. Although the price per share has not been definitively set, Tubby's stated that its shares will be valued at approximately two times their current market value, at somewhere between eighty cents and a dollar ($0.80 to $1.00) for purposes of the merger. The proposed merger will be subject, among other things, to a vote of Tubby's shareholders.

Tubby's, Inc., 800-752-0644

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