Landry's Buying Golden Nugget for $140M

LAS VEGAS-Landry’s Restaurants of Houston, TX, has agreed to purchase the Golden Nugget hotel-casino in Downtown Las Vegas for $140 million in cash plus an undisclosed additional payment for certain working capital liabilities. The transaction is expected to close within the next 12 months. The purchase is Landry’s first foray into gaming.The Golden Nugget is the centerpiece of Downtown Las Vegas. It opened as a gambling hall in 1946 and now is the largest resort in Downtown with 1,907 guest rooms and suites; 38,000 sf of gaming space and 29,000 sf of meeting and banquet space. Amenities include headline entertainment, five restaurants, a complete spa and salon, 12 meeting and banquet rooms and a year-round outdoor swimming pool with cabanas. The seller is PB Gaming Inc. which is owned by Timothy Poster and Thomas Breitling, the entrepreneurs who founded the revolutionary travel website Travelscape.com and later sold it to Expedia. PB Gaming is the sole stockholder of Poster Financial Group, which owns the hotel. Under the terms of the transaction, PB Gaming would sell all of the shares of Poster Financial to LSRI Holdings Inc., a wholly owned subsidiary of Landry’s Restaurants. The agreement provides that Poster Financial’s currently outstanding Senior Secured Notes due 2011 will remain outstanding obligations of Poster Financial following the closing. The consummation of the sale will result in a change of control of PFG under the terms of the Notes and, as a result, PFG will be required within 30 days of such change of control to commence an offer to purchase any of its Notes for 101% of the aggregate principal amount of such Notes, plus any accrued and unpaid interest. Publicly traded on the NYSE, Landry’s Restaurants touts itself as the nation’s second largest and fastest growing casual-dining, full-service seafood restaurant chain. It’s collection of entertainment-related properties includes casual and fine dining, hospitality and aquarium properties. Specific brands include The Crab House, Rainforest Cafe and Saltgrass Steak House. On the entertainment side, it owns Kemah (TX) Boardwalk, a 40-acre, family-oriented themed entertainment destination that features several of Landry’s restaurant brands as well as amusement rides and retail shops.Landry’s share price rose $3.63, or 12.8% percent, to $32.04 in heavy afternoon trading on the New York Stock Exchange. More than 2 million shares traded hands, which is about seven times its three-month daily average of 367,000 shares. Its shares are up from a 52-week low of $24.75 in late October.Poster and Breitling purchased both the Las Vegas Golden Nugget and the Laughlin Golden Nugget in June 2003 for $215 million and later sold the Reno asset for $31 million. The duo later took part in the Fox reality television show, “The Casino,” which was short lived.