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Landry's to acquire Claim Jumper

Company's $76.6M offer tops two other bidders in bankruptcy auction

Landry’s Restaurants Inc. won the 45-unit Claim Jumper chain in a bankruptcy auction with a $76.6 million bid, beating offers from a private-equity firm and a group that included the casual-dining concept's founder, Craig Nickoloff.

Following negotiations that went late into the night Thursday, Landry’s bid of $48.3 million in cash, $23.3 million in assumed liabilities and $5 million in letters of credit was deemed the highest and best offer. The proposed acquisition is scheduled for bankruptcy court approval on Nov. 2.

Irvine, Calif.-based Claim Jumper filed for Chapter 11 on Sept. 10 in U.S. Bankruptcy Court in Delaware. At the time, the company said it planned to sell most of its assets to Private Capital Partners, an affiliate of investment firm Canyon Capital Advisors LLC and an investor in the company, though it said it would consider other potential buyers.

When Landry’s made its first bid on Claim Jumper in late September, Private Capital Partners upped its offer to match Landry’s for a total of $56.15 million, including cash of $27 million and the assumption of liabilities. With that bid, Private Capital was selected as the stalking horse going into the auction.

Landry’s Restaurants’ final bid on Thursday beat both Private Capital's offer and that of a group of investors that included Craig Nickoloff, who founded Claim Jumper in 1977 and has made two other attempts in recent months to buy back the company he sold for about $220 million in 2005.

Landry’s Restaurants is the operator of more than 200 restaurants, including the Rainforest Café, Saltgrass Steak House and Landry’s Seafood House chains. In April, the company bought the Oceanaire Seafood Room chain out of bankruptcy. The company also owns two Golden Nugget Hotels and Casinos in Nevada.

Earlier this month, Landry’s chief executive and founder Tilman Fertitta completed a $1.4 billion buyout of the company, which he had been trying to take private for nearly two years.

"We are excited that the Claim Jumper restaurant chain has joined the Landry’s restaurant family," Fertitta said in a statement Friday. "Claim Jumper is a family favorite and dominates the restaurant markets in which they are located.”

In court filings in the Claim Jumper auction, Landry’s Restaurants argued that it had the financial wherewithal to acquire and successfully operate the Claim Jumper chain.

Claim Jumper chief financial officer William Taves said in court filings that the casual-dining chain was hit hard by the economic downturn after falling deep into debt with rapid expansion, adding 13 locations between 2006 and 2009.

Claim Jumper’s annual revenue of about $293 million in 2007 dropped to $233 million in 2009. Profit of $6.3 million in 2007 dropped to a loss of $5.8 million by 2009.

“On behalf of the entire management team at Claim Jumper’s, we are very pleased to be joining Landry’s restaurant family," Mark Augarten, Claim Jumper's chief operating officer, said in a statement Friday. “As part of the Landry’s umbrella of restaurants, our loyal guests can be confident that we will continue to provide great food and service.”

Contact Lisa Jennings at [email protected].

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