Landry's Ends Ferttita's Buyout Offer, Industry Pundits Respond
Tilman Fertitta won't be buying Landry's Restaurants, the company he founded in the late 1980s. Today, the Houston based restaurant and casino operator announced it ended its $214.7 million go-private deal, citing "unusual circumstances."
By David Farkas, Senior Editor -- Chain Leader, 1/12/2009 1:55:00 PM
Tilman Fertitta won’t be buying Landry’s Restaurants, the company he founded in the late 1980s. Today, the Houston-based restaurant and casino operator announced it ended its $214.7 million go-private deal, citing “unusual circumstances” with the lenders and the Securities and Exchange Commission.
The company said the SEC required it to disclose “certain information” from a commitment letter issued by Jefferies & Co. and Wells Fargo & Co., the deal’s lead lenders.
The information included the proposed financing terms for the going-private transaction. Landry’s said the lenders told the SEC they wanted to keep the terms confidential. Any disclosure would violate the commitment the lenders made to Landry’s.
Industry observers wondered if the government actually had anything to do with the collapse. “Why would you bring the specter of the SEC into a busted financing commitment when busted deals are yesterday’s news?” declared Allan Hickok, managing director of Houlihan Lokey, an investment bank.
Jim Parish, a financial advisor and former restaurant executive, labeled the termination a “straw dog,” speculating there was a “convenient provision” in the commitment letter that permitted the parties to walk away from the deal.
In late November Fertitta cut his price to $13.50 a share from his first offer of $21. Shares plunged 35 percent on Monday’s news, to $8.34 in late afternoon trading on Monday.
Both Parish and Hickok predicted Landry’s would eventually become a private company. “Don’t forget Tilman’s reputation as a tenacious bulldog,” Parish noted.
Declared Hickok: “Fertitta is the last person on God’s green earth to want to see [the transaction] collapse. He bought a lot of stock.”
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