Landry's Acquires McCormick & Schmick's For $131.6M

McCormick & Schmick's Seafood Restaurants Inc. has agreed to be acquired by Landry's Inc. in a tender-merger deal valued at $131.6 million, the companies said Tuesday.

Landry's MSA Co. Inc. has offered $8.75 per share for the Portland, Ore.-based seafood chain. McCormick & Schmick's had closed Monday at $6.77 a share. Houston-based Landry's said it already had arranged financing, and the companies expect the deal to close in late December or January.

Tilman Fertitta, owner of Landry's, already owns about 10.1 percent of MSSR's shares, making him one of the chain's largest stockholders.

"We have been a fan of the McCormick & Schmick's brand for years," Fertitta said in a statement. "As a public company, MSSR 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, However, Landry's size, strength and financial resources will positively accelerate the future for MSSR."

Douglas Schmick, chairman of MSSR's board, said separately: "After a broad and comprehensive evaluation of strategic alternatives, the McCormick & Schmick's board of directors concluded that the sale of the company to Landry's will provide substantial and immediate cash value for our stockholders."

The contentious courtship has been ongoing since April, when Fertitta first offered to acquire the company for $9.25 a share. MSSR's board rejected the first proposals, but authorized a look at strategic alternatives.

McCormick & Schmick's generates more than $300 million in annual revenues at its 80 restaurants in 26 states in the United States and Canada.

On Monday, MSSR reported a net loss or $2.5 million for the third quarter, which ended Sept. 28, compared with a profit of $1 million in the same period last year. Revenues were down 4.2 percent, to $81.4 million from $84.9 million in the third quarter last year. Same-store sales were off 1 percent in the quarter.

"McCormick & Schmick's complements Landry's signature seafood concepts and expands our presence in highly prized locations," Fertitta said.

Landry's owns a variety of hospitality venues, ranging from such restaurants as Landry's Seafood House, Rainforest Cafe, The Chart House, Bubba Gump Shrimp Co., Claim Jumper, Saltgrass Steak House and Oceanaire to the Golden Nugget Hotel & Casinos in Las Vegas and Laughlin, Nev., and Atlantic City, the Kemah Boardwalk, the San Luis Resort Hotel, and the Downtown Aquariums in Denver and Houston.

Landry's said it and Fertitta's affiliated companies will generate about $2 billion in revenue in 2011.

EARLIER: Fertitta pulls McCormick & Schmick's offer
• Fertitta ends proxy fight with McCormick & Schmick's
• McCormick & Schmick's pursues possible sale
• Fertitta bids $137.3 million for McCormick & Schmick's

Contact Ron Ruggless at ronald.ruggless@penton.com.
Follow him on Twitter: @RonRuggless