HOUSTON Frustrated in its initial attempt to acquire the New York-based Smith & Wollensky Restaurant Group, Landry's Restaurants Inc. has sweetened its per-share bid to $9.75, 50 cents higher than the bid the high-end steakhouse chain already had accepted from Patina Restaurant Group LLC earlier this month.
Landry's had offered to buy S&WRG for $7.50 per share, or $64.5 million, before the $79.6 million offer from Patina had been tendered. The new offer amounts to $84 million.
In its latest letter to S&WRG's board, Houston-based Landry's said its intention to keep the company's New York properties "allows us to offer 50 cents more to the S&WRG shareholders" than Patina is willing to tender. In the deal agreed upon by S&WRG and Patina, Smith & Wollensky founder and chief executive Alan Stillman would pay $5.3 million to purchase and operate the New York properties, which include the flagship Smith & Wollensky, Maloney & Porcelli's, Quality Meats, Park Avenue Cafe and the Post House.
"We believe that these assets are being sold to Mr. Stillman at a discount to their fair market value," Landry's said in the letter to the special committee that was formed by S&WRG's board to consider a change in ownership.
Landry's said its new offer was contingent on scuttling the agreement between Patina and Stillman for the transfer of the New York restaurants. Landry's also set the condition of S&WRG not entering into any severance agreements with the company's officers, "which we view as 'self-serving,'" Landry's wrote.
While Landry's initial bid to buy S&WRG largely was seen as unfriendly, Stillman said the deal with Patina was the result of a longtime friendship with Nick Valenti, chief executive of Patina, which operates some 65 premium concepts on the east and west coasts, including The Sea Grill, Brasserie, Patina and the Pinot bistro chain. Smith & Wollensky operates 14 restaurants, 11 of which are owned and three of which are managed.
Securities filings reveal that Landry's sold 726,000 shares of S&WRG for a price of $9.13, or $6.6 million, on Feb. 26, the day the deal with Patina was disclosed.
Landry's operates more than 300 full-service restaurants in 35 states, including Landry's Seafood House and Rainforest Cafe. It also owns and operates several casinos and entertainment complexes.
