NEW YORK Activist hedge-fund manager William Ackman, through his Pershing Square Capital Management fund, has acquired a large stake in Landry’s Restaurants Inc. and is set to oppose the restaurant company’s $1.2 billion buyout deal.
Ackman’s Pershing Square of New York filed documents Friday with the Securities and Exchange Commission that said the fund and its affiliates had acquired about 1.6 million shares, or nearly 10 percent, of Landry’s outstanding stock for $21.7 million. Pershing also reported it had obtained equity swaps on another 2.2 million Landry’s shares, bringing the fund’s total interest in Landry’s to about 3.8 million, or 23.7 percent. Shares owned with swaps, however, typically do not hold the rights to vote on mergers and acquisitions.
Ackman, who is an activist shareholder and has been involved in corporate changes at McDonald’s Corp. and Wendy’s International Inc., signaled Pershing’s intent to fight Landry’s buyout deal led by the company’s chairman and chief executive Tilman Fertitta, who has been trying to restructure the company for nearly two years. In its filing, Pershing Square said, “The reporting persons do not intend to support the transaction.”
On Nov. 3, Landry’s board reached a buyout deal with Fertitta for $14.75 per share, which values the company at about $238 million. The remainder of the deal value is based on debt. Fertitta owns more than 55 percent of Landry’s shares, but those shares will not be counted in the vote for or against the buyout.
Landry’s shares closed at $16.18 on Friday.
In other Landry’s developments last week, a shareholder filed a suit in district court of Harris County, Texas, seeking class-action status and claiming that Fertitta’s buyout bid was “unfair and grossly inadequate.” Ralph Biancalana in his Nov. 10 suit seeks to halt the buyout.
Landry’s owns such casual-dining chains as Landry’s Seafood House, Saltgrass Steak House, Chart House and Rainforest Café as well as hotel and entertainment properties. It also owns the Golden Nugget Hotel & Casinos in Las Vegas and Laughlin, Nev.
Contact Ron Ruggless at [email protected].
