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Benjamin Spillman

Golden Nugget owner fails in private bid

13 January 2009

LAS VEGAS, Nevada -- Tilman Fertitta's second attempt to take private the parent company of the Golden Nugget hotel-casinos ran aground Monday.

Landry's Restaurants Inc. reported it won't close a deal that would give Fertitta, its chief executive officer, control of the company because of a reluctance to disclose certain details to the Securities and Exchange Commission.

The company's stock fell nearly 34 percent to $8.16.

"The banks are thus not funding a (leveraged buyout offer)," wrote bond analyst Barbara Cappaert of KDP Investment Advisors. "And the only ones to lose are the shareholders who saw their stock fall nearly 40 (percent) this morning."

It's the second time in less than a year that Fertitta failed to close a deal for Landry's, which owns 179 restaurants such as the Chart House and Rainforest Café, as well as the Golden Nugget properties in Las Vegas and Laughlin.

The first attempt was an offer to buy the company at $21 per share that fell apart in October thanks to damage to several units in Texas from Hurricane Ike.

The August storm did an estimated $50 million in damage, much of it to Landry's units in Galveston and Kemeh, Texas, not far from the firm's Houston headquarters.

The combined impact of the hurricane and emerging recession undermined the ability of Landry's to meet financial performance goals banks established as conditions for funding the buyout.

Fertitta made another offer at $13.50 per share.

That's the deal that was reported as dead on Monday.

"We felt that it was in the best interests of our stockholders to terminate the merger agreement in order to maintain the alternative financing," Michael Chadwick, chairman of the special commission formed by the company's directors to deal with Fertitta's bid, told "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 the SEC wanted information from Jeffries & Co. and Wells Fargo & Co., Fertitta's bankers, that the private parties had agreed to keep confidential.

Despite the problem, another deal between Landry's and the two banks to refinance $400 million in debt remains intact, the site reported.

Golden Nugget owner fails in private bid is republished from