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Benjamin Spillman

Landry's chief executive makes another attempt to buy up remaining shares of company

22 October 2008

LAS VEGAS, Nevada -- Landry's Restaurants CEO Tilman Fertitta has revived his offer to buy the company, an empire that includes the Golden Nugget hotel-casinos in Las Vegas and Laughlin as well as about 179 restaurants in 28 states.

It's Fertitta's second attempt to buy the public company he now runs.

The first proposal fell apart thanks to a combination of a suddenly apparent national recession and an untimely hurricane that wiped out several of Landry's top-performing business units.

The new offer would value the company at $13.50 per share, or about $218 million.

Fertitta's previous offer was $21 per share, or about $339 million. He controls about 39 percent of the company.

Landry's shares fell 21 cents, or 1.8 percent, Tuesday to close at $11.45 on the New York Stock Exchange, which values the company at about $185 million.

Fertitta secured new financing with bankers during the weekend, according to the Houston Chronicle, the newspaper located in the same city as Landry's headquarters.

Because he already controls so much of the company, Fertitta needs just 12 percent of the other shareholder votes to approve the sale.

But bond analyst Barbara Cappaert of KDP Investment Advisors Inc., says potential problems remain.

The deal terms aren't public so it is unclear whether there are restrictions on the funding that would affect the debt or prevent it from going through if Landry's doesn't meet certain performance standards.

The likelihood of missing certain performance benchmarks contributed to the demise of the previous offer thanks to damage wrought by Hurricane Ike on several Landry's properties in Houston and Galveston, Texas, Cappaert said.