McCormick & Schmick’s Seafood Restaurants Inc. on Wednesday rejected a $137.3 million hostile bid by Tilman J. Fertitta and a subsidiary of his Landry’s Restaurants Inc.
Douglas Schmick, chairman of the 96-unit Portland, Ore.-based upscale seafood chain, said in a statement that McCormick & Schmick’s board “believes that the LSRI Holdings offer undervalues the company, is highly conditional, opportunistically timed and seeks to advance the financial and competitive interests of LSRI Holdings at the expense of all other McCormick & Schmick’s stockholders.”
On April 7, Fertitta commenced his offer, through the LSRI Holdings Inc. subsidiary, of $9.25 per share, which would be valid for shareholders interested in tendering their shares through May 6.
That offer was a 30-percent premium over the $7.21 per share price at the close of trading before Fertitta announced his plans for McCormick & Schmick’s. On Wednesday, McCormick & Schmick’s shares closed at $9.29 per share. Fertitta already owns about 10.1 percent of shares in upscale seafood restaurant operator.
Fertitta, in making his offer official, said: “We believe our offer price of $9.25 per share in cash would deliver substantial, immediate and highly certain value to MSSR’s stockholders. The board’s initial response to our intended tender offer and its unwillingness to engage in mutually beneficial discussions for a negotiated transaction is not in the best interests of stockholders.”
Schmick urged shareholders to reject the LSRI offer, saying McCormick & Schmick’s board would “continue to consult with its advisors regarding potential and appropriate next steps that will best serve the interests of the company and all of its stockholders.”
Fertitta is the founder and chief executive of Landry’s, which he took private in a $1.4 billion deal last year. Since then, Landry’s has acquired a number of restaurant chains, buying the 12-unit Oceanaire Seafood Room and 45-unit Claim Jumper concepts in bankruptcy court deals and purchasing the 32-unit Bubba Gump Shrimp Co.
Landry’s also owns such brands as Chart House, Landry’s Seafood, Rainforest Café and the Golden Nugget Hotels and Casinos.
McCormick & Schmick’s owns 89 restaurants in the United States and seven locations in Canada under The Boathouse brand.
Contact Ron Ruggless at [email protected].