HOUSTON Just a day after Landry’s Restaurant Inc. revealed that a buyout offer had been submitted by its chairman, at least one securities law firm is circling the casual-dining company’s shareholders, initiating what it called an “investigation” into the proposed deal and offering advisory services surrounding shareholder rights.
Cauley Bowman Carney & Williams PLLC, a Little Rock, Ark.-based law firm, said late Tuesday it started an investigation into the proposal, but did not provide any additional details. It is common for management-led buyouts to draw shareholder lawsuits, and litigation plagued some of the largest recent restaurant deals, including the purchases of OSI Restaurants and Tim Hortons.
Landry’s chairman and chief executive Tilman J. Fertitta on Sunday proposed to purchase the company for $23.50 per share, or about $380 million, and assume the restaurant company’s debt, which would bring the transaction value to a total of about $1.3 billion. Fertitta owns about 39 percent of Landry’s shares outstanding and said he was confident that he could finance the deal mainly through his equity and cash. The proposed per-share price represents a 41-percent premium over the stock’s closing price on Jan. 25, the trading day prior to the announced bid. Landry’s stock has traded between $14.18 per share and $32.30 per share for the past 52 weeks.
Landry’s, which operates about 200 restaurants and the Golden Nugget casinos, said Monday it established a special committee of independent directors to review Fertitta’s proposal. The committee, which also been authorized to review any alternative proposals, is in the process of hiring legal and financial advisors.
The company’s stock price jumped on news of the offer, rising 23 percent Monday to $20.45. Still, according to The Wall Street Journal, two analysts at two boutique investment firms questioned whether the per-share price tag was too low or truly reflected the value of Landry’s operations. The analyst agreed, however, that unless a higher offer is proposed, Fertitta will most likely succeed in the buyout, the Journal reported.