Landry’s Restaurants Cancels Fertitta’s Takeover Bid
Landry’s Restaurants has canceled a takeover bid from CEO Tilman Fertitta, citing a conflict over the disclosure of information, the Houston company announced Monday.
The Securities and Exchange Commission required Landry’s to disclose information from a financing-commitment letter that the lead lenders — Jefferies Funding LLC, Jefferies & Co., Jefferies Finance LLC and Wells Fargo Foothill — insisted be kept confidential, Landry’s said in a statement.
The company is pursuing alternative financing under a commitment from the lead lenders to refinancing approximately $400 million in senior notes. If the lead lenders had terminated their commitment, no financing would have been available to privatize the company, Landry’s said.
“While this must be extremely disappointing to our shareholders, the Special Committee recognizes that the financial markets are in crisis and respects the position of our lenders,” said Michael Chadwick, chairman of a special committee formed by the board to investigate the proposed acquisition. “We felt that it was in the best interest of our stockholders to terminate the agreement in order to maintain the alternative financing.”
Landry’s shares plummeted $4.19, or 34 percent, to $8.19 at 4:07 p.m. yesterday in New York Stock Exchange composite trading, the largest drop since its initial public offering in August 1993.
In October, Fertitta offered to acquire the outstanding shares of the company he didn’t already own for $13.50 each. As of Dec. 2, Fertitta owned about 54 percent of the company’s shares, according to Bloomberg.
“They’ll have a significant debt burden going forward,” William Hamilton, an analyst at SMH Capital in New York, told Bloomberg. “That’s going to potentially restrict their investments in the business.”
Landry’s operates several restaurant chains nationwide, including Landry’s Seafood House and Chart House, and the Golden Nugget Hotel and Casino in Las Vegas and Laughlin, Nev.