Landry's tops SWRG offer but would keep NYC units

Nation's Restaurant News,  March 26, 2007  

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HOUSTON -- Landry's Restaurants Inc., frustrated in its initial attempt to acquire New York-based Smith & Wollensky Restaurant Group, has sweetened its per-share bid to $9.75-50 cents higher than the overall $79.6 million bid that SWRG had accepted from privately held Patina Restaurant Group LLC earlier this month.

However, Landry's seeks to buy all the restaurants of publicly held Smith & Wollensky, including the New York properties that Patina agreed to let SWRG founder Alan Stillman buy back for $5.3 million--a price that Landry's asserts is below fair market value.

Landry's, whose new bid totals $84 million, previously offered $7.50 per share, or $64.5 million, for the Smith & Wollensky chain of more than 15 restaurants in some 10 cities nationwide.

In its latest letter to SWRG's board of directors, the Houston-based company said it exceeded Patina's bid because of Landry's intention to keep the New York properties, including the flagship Smith & Wollensky unit as well as Maloney & Porcelli's, Quality Meats, Park Avenue Care and the Post House.

"We believe that these assets are being sold to Mr. Stillman at a discount to their fair market value," Landry's said in the letter to the special committee that was formed by SWRG's board to consider a change in ownership.

Separately, Landry's said March 16 that it was unable to meet the deadline for filing its fiscal 2006 fourth-quarter and full-year financial results with securities regulators because of its not-yet-completed review of the company's stock option granting policies. Landry's said it expects to restate its financial results back through 2001, and explained that aggregate noncash charges over the 14-year period it has granted stock options could total $6 million to $8 million.

Landry's did report that fourth-quarter revenue from continuing operations increased 5.6 percent to $275.7 million, and annual revenues rose 26.4 percent to $1.1 billion.

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