Landry’s Restaurants to buy McCormick & Schmick’s
After months of hostile volleys, McCormick & Schmick’s Seafood Restaurants has succumbed to a takeover bid from Landry’s Restaurants Inc., which owns the Rainforest Cafe and other chains.
In a deal valued at $131.6 million, Houston-based Landry’s will buy McCormick & Schmick’s for $8.75 a share — a 29% premium above McCormick’s closing price Monday.
The deal is expected to close next month or early next year, Landry’s said.
Landry’s will take on the more than 80 restaurants operated by the Portland, Ore., seafood chain, including McCormick & Schmick’s locations in downtown Los Angeles, Pasadena and Beverly Hills, and also McCormick & Kuleto’s in San Francisco and Spenger’s Fresh Fish Grotto in Berkeley.
Other chains owned by Landry’s include Bubba Gump Shrimp Co. and Claim Jumper, plus several hotels and casinos.
Landry’s owner Tilman J. Fertitta, who is one of McCormick’s largest shareholders with more than 10% of the outstanding common stock, continued pursuing the seafood chain even after it rejected his initial overture in April.
The seafood chain’s net income slipped 10% in the third quarter to $92 million from $102.4 million a year earlier.
McCormick & Schmick’s, Fertitta said in a statement Tuesday, “fell victim to the need to grow” and in the process “located some restaurants in secondary markets which were adversely impacted to a greater degree by the economic downturn.”
In the wake of the takeover announcement, McCormick & Schmick’s stock rose $1.86 on Tuesday, or more than 27%, to $8.63 a share.
