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Landry's agrees to buyout price

Oct 28, 2008 4:07 PM

by Ray Poirier | Now that the directors of Landry’s Restaurants Inc. (LNY) have agreed to accept his third – and final – buyout price of $13.50 a share, Tilman Fertitta, chairman and CEO, has decided to reduce his payout price by acquiring more shares.

When he first made his pitch, Fertitta owned about 39% of the company, a feature that his bankers, Jefferies & Co., felt would make generating the needed cash a lot easier.

This time, however, he has increased his ownership to 42.5% by acquiring another 728,595 shares.

In a filing with the Securities & Exchange Commission, Fertitta indicated he had purchased the shares on the open market at prices ranging from $11.41 to $11.58 per share, probably saving himself a couple of bucks per share when the deal goes through.

The only qualifier was that Fertitta agreed not to vote these shares in favor of adoption of the merger. The dollar outlay for these shares amounted to about $8.4 million.

When Fertitta, a cousin of the principal owners of Station Casinos Inc. of Las Vegas, first pitched the buyout it was with a price of $23.50 per share.

As the market conditions deteriorated, and the directors had not acted on the offer, he lowered his bid to $21 a share. This offer was accepted but because of the lack of available cash from financial institutions, the bid was withdrawn.

Since the most recent offer, the company’s shares have been trading in a range just above $11 per share.