Steakhouse Morton's to sell itself to Landry's

Executives have met at Morton's steakhouses for more than three decades, talking shop and making deals. Now the storied Chicago chain is making a deal of its own, selling itself to Texas restaurateur and Landry's Inc. Chief Executive Tilman Fertitta.


Fertitta's acquisition of Morton's Restaurant Group Inc., announced Friday, values the high-end steakhouse chain at about $116.6 million. Houston-based Fertitta is offering $6.90 per share in cash for Morton's, a 33.7 percent premium over the company's Thursday closing price of $5.16. The deal is expected to close in early February 2012.


On Friday, shares of Morton's soared nearly 33 percent to close at $6.85.


Morton's had said in March it was considering a sale of the company and had the blessing of Castle Harlan Inc. and Laurel Crown Partners LLC, its largest shareholders. Fertitta already owns 5 percent of Morton's. The industry veteran, whose holdings at Landry's include Rainforest Cafe and Claim Jumper, described himself as a longtime admirer of the Chicago steakhouse.


"Morton's is the largest, most iconic high-end restaurant chain in America and I've always thought a lot of it," Fertitta told the Tribune in an interview. "They have excellent food and great service."


Morton's has 77 steakhouses in 64 cities worldwide; it also operates Trevi, an Italian restaurant at Caesars Palace in Las Vegas. While the recession caused revenues to fall almost 15 percent to $281.1 million in 2009, the company rebounded last year with the help of an expanded bar menu offering lower-price items. When Morton's reported third-quarter earnings in October, it projected full-year 2011 revenues of $321 million to $323 million.


Fertitta said he plans to retain much of Morton's management, which he praised for having "grown the company in tough times over the last couple of years."


In a statement, Morton's Chief Executive Christopher Artinian said "Tilman has an outstanding portfolio of restaurants. He really understands the value of the Morton's brand and our people, and is well-positioned to further enhance our reputation as the world's best steakhouse.


The price represents a 34 percent premium over Morton's Thursday closing stock price of $5.16. The deal price is based on the company's 16.9 million outstanding shares.


Morton's shares rose $1.64, or 32 percent, to $6.80 in morning trading.


Fertitta already owns about 5 percent of Morton's stock, making him the company's fourth-largest shareholder, according to FactSet. He will finance the deal with cash and debt.


Morton's said earlier this year that it was considering a sale of the company. The company's board has approved Fertitta's offer. Morton's said its largest stockholder, Castle Harlan, has agreed to tender its shares. The investment firm owns about 28 percent of the steakhouse chain.


Morton's owns 77 of its namesake steakhouses in the U.S., China, Mexico, Canada and Singapore. It also operates the Italian restaurant Trevi in Las Vegas.


Fertitta said that Morton's is one of the most recognizable and successful steakhouse brands in the world, and he plans to refresh and modernize the restaurants.


The sale is expected to close in early February.


Landry's also owns the Golden Nugget Hotel & Casinos in Nevada and Atlantic City, N.J., along with hotels and aquariums in Denver and Houston. Landry's said it expects about $2 billion in revenue in 2011.