Fertitta cuts offer for Landry's to $13.50 per share

By Lisa Kerner

Charlotte, N.C., Oct. 20 - Fertitta Holdings Inc. said it will acquire Landry's Restaurants, Inc. for $13.50 per share under the companies' amended merger agreement.

The debt financing needed by chairman, president and chief executive officer Tilman J. Fertitta to acquire the company remained in jeopardy at the prior $21.00-per-share price, a Landry's news release said.

In June, the Houston-based restaurant company agreed to be acquired by Fertitta through Fertitta Holdings for $21.00 cash per share in a transaction valued at about $1.3 billion, including debt of about $885 million.

Fertitta, with a 39% stake in Landry's, cited the "unprecedented collapse of the credit markets, the closure of the company's Kemah and Galveston properties and the slow down in the casual dining and gaming industries," as reasons for the reduced offer price.

According to Landry's, the $13.50-per-share offer price is a 49% premium over Landry's closing price on Oct. 17.

Landry's said it expects the transaction to close in the first quarter of 2009.

Fertitta Holdings and lenders Jefferies Funding, LLC, Jefferies & Co., Inc., Jefferies Finance, LLC and Wells Fargo Foothill, LLC agreed they would not claim that a material adverse effect had occurred as a result of the amended agreement.

The lenders agreed to provide Fertitta Holdings with only $500 million in funded debt financing under their amended debt financing commitment, the release said.

Fertitta Holdings negotiated and obtained on behalf of Landry's an alternative financing commitment from the lenders in the event the acquisition is not completed. The alternative financing would be sufficient to repay the company's existing debt, which is subject to acceleration and redemption starting in December.

The financing commitment expires on Feb. 15.

Landry's board of directors approved the amended agreement and recommended its stockholders vote in favor of the deal at a meeting expected to be held in December.

The amended agreement also allows for a new 30-day "go-shop" period, allowing Landry's to solicit superior acquisition proposals from third parties.

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