Landry's shares climb after shareholder nixes bid

AP News
Posted: Nov 16, 2009 11:07 AM

Shares of restaurant chain Landry's Restaurants Inc., which is being taken private by its CEO, rose to a 21-month intraday high Monday after a shareholder announced plans to oppose the $1.2 billion deal.

In a regulatory filing Friday, representatives of Pershing Square Capital Management disclosed a nearly 10 percent stake in the restaurant chain. They also said they would oppose CEO Tilman Fertitta's bid to buy the remaining shares of the company that operates Landry's Seafood House, Chart House, Rainforest Cafe and others as well as hotels and the Golden Nuggets Hotels and Casinos in Nevada.

Fertitta already owns a 55.1 percent stake in the company and earlier this month offered $14.75 per share for the rest of the restaurant chain.

The deal still needs shareholder approval and is contingent on the company refinancing part of its debt. If both conditions are met, it could close in the first half of 2010.

Landry's is the nation's second-largest operator of seafood restaurants, behind Red Lobster owner Darden Restaurants Inc.

Meanwhile, Pershing Square is led by activity financier William Ackman who lost a bid to enlarge Target's board and infuse it with new blood earlier this summer

Landry's shares climbed $4, or 24.8 percent, to $20.20 in midday trading Monday.

Its stock hasn't traded that high since February 2008.