Landry's scraps proposal to go private
Posted
Jan 13 2009, 01:54 PM
by
Kim Peterson
Rating:
Shares of Landry's Restaurants (LNY) are still reeling Tuesday after the company dropped a $217 million deal to go private under its chief executive officer. The government asked Landry's to release more information about the deal, and Landry's decided to call the whole thing off rather than comply.
Landry's, which owns the Rainforest Cafe, The Chart House and Charley's Crab restaurant chains, said that the Securities and Exchange Commission wanted information from a commitment letter by the lenders funding the deal. But the lenders got skittish, saying they would pull out if those disclosures were made.
So now, Landry's is just going to refinance $400 million in debt with those lenders. Shareholders were not pleased by the news, sending the stock price down 35% at one point. Shares were at $8 Tuesday, half of what they were six months ago.
Chief Executive Tilman Fertitta had planned to buy the company for $21 per share in cash. Perhaps Fertitta can find other lenders who might be more open to the SEC's demands. But in this economy, that doesn't seem likely.
