Landry's offers to buy Smith & Wollensky for $64M

HOUSTON In an ongoing push to reposition itself as a high-end restaurant and entertainment-venue operator, Landry's Restaurants Inc. has alerted the board of Smith & Wollensky Restaurant Group Inc. that it intends to acquire the upscale steakhouse operator.

In a letter to Smith & Wollensky management, Landry's offered to acquire the New York-based group "through merger or otherwise" for $7.50 per share in cash, a 50-percent premium on the Jan. 12 market price of $5.03 a share. The estimated purchase price would be about $64.5 million.

Landry's said in the letter that it had met with Smith & Wollensky's senior management, but "unfortunately, we have been unable to reach an understanding on a transaction which we believe is clearly compelling for SWRG's stockholders."

Smith & Wollensky said its board has formed a special committee of independent directors to consider Landry's offer and make a recommendation to the full board. It also indicated that a financial advisor would be retained to offer an opinion on the proposed deal. It called the Landry's proposal "highly conditional."

Smith & Wollensky operates 14 restaurants, 11 of which are owned and three of which are managed. Its brands include Smith & Wollensky, Maloney & Porcelli's, Quality Meats, Park Avenue Cafe and the Post House.

Landry's operates more than 300 full-service restaurants in 35 states, including Landry's Seafood House, Rainforest Cafe, Chart House and Charley's Crab. The Houston-based company also owns and operates the Kemah Boardwalk, Aquarium Restaurants, and the Golden Nugget Casinos. Late last year, Landry's agreed to sell its casual-dining Joe's Crab Shack division to JCS Holdings LLC. JCS agreed to purchase 120 of its 143 units for about $192 million. The remaining 23 outlets are expected to be converted to another concept. Landry's also said it was shopping its other casual-dining concept, the Texas-themed Saltgrass Steakhouse.