$1.3-billiontransaction.

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Tilman J. Fertitta, chairman, president and CEO of Houston-basedLandry's and owner of Fertitta Holdings Inc., has told the specialcommittee of the board of directors that the shutdown of itsKemah andGalveston restaurants, deterioration in the casual diningand gaming industries and problems with the credit market mean debtis very difficult to obtain, particularly at the current price pershare. He says he is in negotiations with Jefferies & Co. inNew York City about financing. In the press release, it was notedLandry's had filed a preliminary proxy to hold a shareholders'meeting Nov. 3.

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When the definitive agreement was signed in June, FertittaHoldings had planned to assume about $885 million of Landry's debt.Furthermore, Fertitta had received financing commitments fromJefferies & Co. and Wells Fargo Foothill LLC of Santa Monica,CA.

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Given the turmoil of the credit markets in recent weeks, therelease says the $21 per share price is now considered too high forthe merger. Calls to Landry's and Fertitta were not returned bydeadline.

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Analyst Paul Westra with Cowan & Co. LLC in New York Citydeclined an interview with GlobeSt.com. The analyst did, however,provide a written statement noting that "a successful takeover isnow less than likely given the troubled financing market." Cowan& Co. is the special committee's financial adviser.

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Hurricane Ike caused wind and water damage to the Landrylocations. Fertitta Holdings' Kemah Boardwalk remains closed. Theboardwalk's first restaurant will reopen in a few weeks, with theproject to be fully up and running by spring 2009. Meanwhile, threeof Fertitta's seven Galveston restaurants are closed, with theirscheduled openings also slated for 2009.

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