* Deal for $8.75/share
* Offer is 29 pct more than MSSR's Monday closing price
* Deal to close deal by late Dec 2011 or early Jan 2012
* Shares up 28 pct
By Meenakshi Iyer
Nov 8 Landry's Inc owner Tilman Fertitta finally
struck a $131.6 million deal to buy out seafood chain McCormick
& Schmick's , ending a months-long pursuit that had seen
the restaurant magnate go hostile with his bid.
The deal sees Fertitta, the biggest shareholder in McCormick
& Schmick's with a near 10 percent stake, snap up the seafood
chain for less than his $137.3 million offer in April.
"(Fertitta) is a very brutal operator. He probably sees a
lot of fat that he could cut out of McCormick & Schmick's cost
structure," Capstone Investments analyst Stas Kislev told
McCormick & Schmick's, which owns over 80 restaurants in the
United States and Canada under more than 11 brands, has not been
performing as well as other fine dining restaurants but is seen
to be a good fit for Fertitta's seafood restaurant empire.
Last year, Fertitta bought out seafood restaurant chain
Landry's for $1.4 billion in cash, and the 54-year-old Texan has
been busy ever since -- picking up chains like Bubba Gump
Shrimp, Oceanaire Seafood and Claim Jumper.
On Tuesday, McCormick & Schmick's Seafood Restaurants Inc,
which has now missed market estimates for seven straight
quarters, posted a third-quarter loss compared with analysts'
expectations for a profit, as it faced falling sales and rising
A BIRD IN HAND?
Fertitta's offer of $8.75 a share is 29 percent higher than
McCormick & Schmick's closing price on Monday.
The company's stock traded in the mid-to-high $20s in 2007
but nosedived over the next few years as it struggled to stem
steady declines in same-restaurant sales.
The chain, which traces its roots to the 110 year old Jake's
Famous Crawfish Restaurant in Portland, Oregon, has seen its
stock shed more than 30 percent of its value since Fertitta's
first outlined his plans to buy the company in April.
"McCormick & Schmick's fell victim to the need to grow and
located some restaurants in secondary markets which were
adversely impacted to a greater degree by the economic
downturn," Fertitta said in a statement.
Analyst Kislev reckons McCormick & Schmick's management
wanted to take the deal that was already out there rather than
wait for a more meaty opportunity.
Landry's plans to fund the deal through both cash and debt.
It expects the deal to close by late December or early January
Shares of McCormick & Schmick were trading up at $8.65 on
Tuesday afternoon on Nasdaq.