Thank you for sharing!

Your article was successfully shared with the contacts you provided.

HOUSTON-Hurricane Ike’s devastating impact combined with credit mark instability has stopped Fertitta Holdings Inc.’s proposed merger with Landry’s Restaurants Inc. According to a press release from Landry’s, the current $21 per share price has jeopardized financing needed to complete the $1.3-billion transaction.

Tilman J. Fertitta, chairman, president and CEO of Houston-based Landry’s and owner of Fertitta Holdings Inc., has told the special committee of the board of directors that the shutdown of its Kemah and Galveston restaurants, deterioration in the casual dining and gaming industries and problems with the credit market mean debt is very difficult to obtain, particularly at the current price per share. He says he is in negotiations with Jefferies & Co. in New York City about financing. In the press release, it was noted Landry’s had filed a preliminary proxy to hold a shareholders’ meeting Nov. 3.

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

Given the turmoil of the credit markets in recent weeks, the release says the $21 per share price is now considered too high for the merger. Calls to Landry’s and Fertitta were not returned by deadline.

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

Hurricane Ike caused wind and water damage to the Landry locations. Fertitta Holdings’ Kemah Boardwalk remains closed. The boardwalk’s first restaurant will reopen in a few weeks, with the project to be fully up and running by spring 2009. Meanwhile, three of Fertitta’s seven Galveston restaurants are closed, with their scheduled openings also slated for 2009.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.