Tilman J. Fertitta, owner of Landry’s Inc., said Friday he has agreed to buy Morton’s Restaurant Group Inc., the owner of the 77-unit steakhouse chain, for about $116.6 million.
Fertitta said he has offered $6.90 per share for Morton’s outstanding stock, a 34-percent premium over Morton’s close of $5.16 a share on Thursday. Morton’s has 16.9 million outstanding shares that have traded between $4.18 and $7.75 in the past 52 weeks. Fertitta already owns about 5 percent of Chicago-based Morton’s outstanding stock, which he said made him one of Morton’s largest individual shareholders.
Morton’s board unanimously approved the deal, the company said, and recommended shareholders accept the tender offer. Castle Harlan Partners III L.P., which owns about 27.7 percent of Morton’s stock, has already agreed to tender its shares, the company said in a statement on its website.
"Morton's is one of the most recognizable and successful high-end steak brands in the world,” Fertitta said in a statement. “They are a dominant operator in the high-end steak category. Morton's will be refreshed and modernized while still maintaining its first-class atmosphere and food quality.”
Fertitta, who on Nov. 8 agreed to acquire Portland, Ore.-based McCormick & Schmick’s Seafood Restaurants Inc. in a $131.6 million deal, added that Morton’s plans to introduce new food items and expand its menu.
Christopher J. Artinian, president and chief executive Morton’s, said, Fertitta “really understands the value of the Morton's brand and our people, and is well-positioned to further enhance our reputation as the world's best steakhouse.”
Morton's Steakhouse generates more than $300 million in annual revenue. For the third quarter ended Oct. 2, its net loss was $2.4 million, or 15 cents per share, compared with a net loss of $2.1 million, or 13 cents per share, a year earlier. Revenue for the quarter rose 7.8 percent to $71.4 million, compared with $66.2 million a year earlier.
Morton’s same-store sales rose 5.1 percent in the third quarter, its seventh consecutive period of same-store sales increases.
Fertitta has created Fertitta Morton's Restaurants Inc. and Fertitta Morton's Acquisition Inc., both affiliated with Landry’s Inc., to complete the acquisition.
Landry's, which Fertitta took private last year, owns a variety of hospitality and gaming companies that are expected to generate about $2 billion in revenues in 2011. Restaurant brands include casual-dining Landry's Seafood House, Rainforest Cafe, The Chart House, Bubba Gump Shrimp Co., Claim Jumper, Saltgrass Steak House and Oceanaire, as well as a fine-dining Vic & Anthony's, Grotto, Willie G's and others.
Landry’s also owns the Golden Nugget Hotel & Casinos in Las Vegas and Laughlin, Nev., and Atlantic City, N.J. as well the Kemah (Texas) Boardwalk, the San Luis Resort Hotel in Galveston, Texas, and the Downtown Aquariums in Denver and Houston.
Chicago-based Morton’s operates steakhouses in 26 states and five foreign markets.