NEW YORK — Landry’s Restaurants, owner of the Downtown Aquarium in Denver, Chart House and Rainforest Cafe chains, said chief executive Tilman Fertitta may lower his offer for the company because of damage from Hurricane Ike and instability in the credit markets.
“The debt financing required to complete the pending transaction is in jeopardy,” Landry’s said Tuesday in a statement.
The shares fell 18 percent in New York trading.
Fertitta told Landry’s that he’s negotiating with Jefferies & Co. for funds to buy the company at a price “substantially” lower than the $21 a share he agreed to pay in June, the Houston-based company said.
Even before Tuesday’s announcement, investors had pushed the shares as much as 41 percent below the offer price as they questioned whether Fertitta would be able to complete the deal at that price. The banking crisis has caused global credit markets to freeze, making it difficult for companies to obtain funding.
“If he does come back to the table with a new bid, it could likely range from $12 to $14,” William Hamilton, an analyst at SMH Capital in New York, said.
Hamilton recommends that investors sell the shares.
Messages left with Jefferies spokesman Thomas Tarrant and Fertitta weren’t returned.
Fertitta agreed in June to purchase the part of Landry’s he doesn’t own, about 61 percent, for $415 million and assume $885 million in debt.
Landry’s fell $2.35 to $10.76, 49 percent below the offer, in New York Stock Exchange composite trading.
Landry’s properties were damaged from Hurricane Ike in Houston, Galveston and the Kemah Boardwalk, where some restaurants may remain closed until March.
