Landry's bids for Smith & Wollensky

LAS VEGAS, Nevada -- The restaurant company that owns the Golden Nugget properties in Nevada is looking to expand its hospitality holdings.

Landry's Restaurants on Tuesday said it wants to purchase the steakhouse chain Smith & Wollensky Restaurant Group for $7.50 per share, or about $64.4 million.

Landry's said Smith & Wollensky management is resisting the offer because one of the conditions is that the steakhouse chain doesn't add any new severance benefits for senior managers.

In a letter, Landry's said that despite talks over the past few weeks with Smith & Wollensky's senior managers about an acquisition, "we have been unable to reach an understanding" on a deal that is "clearly compelling for (Smith & Wollensky) stockholders."

In a separate statement, Smith & Wollensky characterized the bid by Landry's as unsolicited and highly conditional but pledged to evaluate it nonetheless.

The per share price Landry's offered was 50 percent above the $5.03 Smith & Wollensky stock had been trading for Friday when the markets closed.

News of the offer sent Smith & Wollensky shares soaring $2.26, or 44.82 percent, to $7.29 in trading on the Nasdaq National Market. Landry's shares climbed 81 cents, or 2.68 percent, to close at $31 on the New York Stock Exchange.

Landry's Restaurants owns and operates more than 300 restaurants, including Landry's Seafood House and Chart House, as well as the Golden Nugget casinos in Las Vegas and Laughlin.

New York-based Smith & Wollensky runs 15 big-city steak houses, including restaurants on the Strip as well as in Chicago, New Orleans, Washington, Philadelphia, Houston, Boston, Miami Beach, Fla.; and Columbus, Ohio. The original Smith & Wollensky, a traditional New York steakhouse, opened in 1977.

Smith & Wollensky said fourth-quarter comparable sales increased 3.9 percent to $33.5 million from the same period a year earlier. Total sales for the quarter rose 7.5 percent to $36.2 million.

For the third quarter, Landry's revenue from continuing operations rose to $290.4 million from $220.9 million a year earlier.

The Associated Press contributed to this report.