UPDATE 2-Landry's CEO cuts offer for company to $21/shr

sabato 5 aprile 2008 00:12

(Adds CFO comments, background, details; updates share movement)

By Dhanya Skariachan

BANGALORE, April 4 (Reuters) - Landry's Restaurants LNY.N CEO Tilman Fertitta cut his offer to buy the company by about 11 percent to $21 a share as rising credit woes squeeze financing options for a possible $1.3 billion deal.

Shares of the restaurant-chain operator rose as much as 27 percent to $19.57, but fell back to close at $17.91 Friday, well below Fertitta's offer price, indicating the proposed deal may not come to fruition.

The revised offer, which is about 37 percent higher than the stock's Thursday closing price of $15.30 on the New York Stock Exchange, values the stock at almost 14 times forward earnings.

Landry's stock, which had fallen 25 percent since news of the initial offer before Friday's gains, trades at about 12 times forward earnings. The Restaurants sector trades at a multiple of more than 19.

"Fertitta's new offer reflects the realities of the marketplace," CFO Richard Liem told Reuters from Houston. But he declined to comment on what would be a good offer for the company.

Landry's, which has appointed a special committee of independent directors to review Fertitta's offer, said it has not received any other proposals.

Fertitta, who has been with the company for more than two decades and currently owns about 39 percent of Landry's, said he has a letter from Jefferies & Co indicating that the investment bank was "highly confident" in its ability to get the debt financing for the deal.   Continua...