State News
Landry's Restaurants OKs $1.2B acquisition offer
HOUSTON (AP) — Landry's Restaurants Inc. said Tuesday that its board approved a $1.2 billion acquisition offer from a company owned by Chairman and CEO Tilman J. Fertitta, who already controlled more than half of Landry's shares.
The news sent shares of the owner of Rainforest Cafe chain and other restaurants surging $2.83, or 26.3 percent, to $13.59 in morning trading. The stock hit a fresh 52-week high of $13.99 earlier in the session.
Fertitta's company will pay $14.75 per share in cash for Landry's stock it doesn't already own. The executive's company owned about 55.1 percent of the company's outstanding shares as of Monday. The deal is a 37 percent premium over Landry's Monday closing stock price of $10.76.
Landry's formed a special committee of directors in September to review its strategic options, including a potential sale.
Fertitta has been interested in purchasing the restaurant owner for a while.
He submitted a proposal in August that would have been a going-private transaction whereby Landry's stockholders would have received shares of Landry's Saltgrass Inc. in exchange for the Landry's shares they owned. The proposal was rejected by Landry's, which called it inadequate.
Fertitta launched a similar privatization bid in 2008, offering $13.50 per share. He shelved that offer this winter when a conflict arose with the Securities and Exchange Commission and lenders about disclosing terms the lenders insisted were confidential.
Fertitta's new proposal announced on Tuesday was more appealing to the company and its shareholders because it is an all-cash transaction.
The acquisition has received board approval, but still needs approval from Landry's shareholders and is subject to the company refinancing part of its debt. The deal is targeted to close in the first half of 2010.
Landry's also has a gambling subsidiary that owns Golden Nugget casinos in Las Vegas and Laughlin, Nev., and it also owns several hotels around the U.S.
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