Market Overview

Landry's Said to be "Very Close" to Acquiring Del Frisco's

A high-level source within Landry's revealed to Benzinga that the company is "very close" to acquiring high-end steakhouse operator Del Frisco's Restaurant Group (NASDAQ: DFRG).

According to the source, intense talks have been going on for quite some time and while senior leadership at Del Frisco's was initially against the proposal, their stance has softened significantly as of late.

Landry's Inc. is one of the largest full-service restaurant groups in the United States, boasting over 480 locations spanning 40 states and 15 countries. In addition to restaurants, the company also owns and operates numerous entertainment properties including The Golden Nugget casinos.

The privately held Landry's, which is based in Houston, has been on a buying spree over the past year, purchasing both Morton's The Steakhouse and McCormick & Schmick's for $116.6 million and $131.6 million respectively.

Landry's CEO, Tilman Fertitta, is well-known for being an active dealmaker. In his time as CEO, he has acquired five public companies and has executed countless smaller transactions. Fertitta took Landry's private in 2010 for $1.4 billion in an effort to gain more freedom in his business making decisions - something he has taken full advantage of. He now serves as Landry's Inc.'s CEO, President, chairman of the board, and primary shareholder.

The timing of the possible acquisition is interesting, considering Del Frisco's recently went public on July 27th, 2012. The company currently owns and operates 33 restaurants in 19 states, including Sullivan's Steakhouse and Del Frisco's Double Eagle Steakhouse concepts.

While the source did not speculate on a possible acquisition price, recent buyouts of Morton's and McCormick and Schmick's may serve as plausible references. Landry's offered a 34% premium to shareholders of Morton's ($6.90 offer versus $5.16 market price) and a 29% premium to shareholders of McCormick and Schmick's ($8.75 offer versus $6.77 market price).

A 30% premium would value shares of Del Frisco's (current market price $14.46) at $18.80.

Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.

Posted-In: Del Frisco's Double Eagle Steakhouse Landry's Inc. McCormick & Schmick's Morton's The Steakhouse Sullivan's Steakhouse The Golden Nugget Casinos Tilman FertittaLong Ideas News Rumors Restaurants M&A Hot Pre-Market Outlook After-Hours Center Trading Ideas General

 

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