Steven Davidoff has analyzed a headscratcher of a deal that has had M&A lawyers scratching their heads for years: Tilman Fertitta’s $1.3 billion management buyout of Landry’s Restaurants, which he called a “Deal from Hell” earlier this year. Fertitta made a no-premium offer for the company, then bought some stock on the open market, ended up with control, and somehow got the company to terminate, which meant he got to walk away without even paying the breakup fee. The board ended up in all sorts of hot water, and the deal is still in the middle of a mess of litigation, as one of former Chancellor Lamb’s last acts before joining Paul Weiss.
Fertitta has decided to make another run at the restaurant chain, but this time the company has switched lawyers and bankers. More on that, after the jump.
We’ll let Davidoff describe the switch:
First off, the special committee has replaced its old investment banker, Cowen & Company, and its law firm, King & Spalding, with Moelis & Company and Cadwalder Wickensham & Taft. New blood is a good thing here, considering how badly the previous acquisition was handled. Still, I am slightly surprised that these firms would associate themselves with this tortured deal and Mr. Fertitta. Their association with this deal is particularly disappointing, since once again the Landry’s special committee failed in many ways.
As you can see from the blackline, which he was kind enough to provide, Cadwalader didn’t reinvent the wheel. There aren’t a lot of changes to the agreement, and the Deal Professor column highlights the substance.
The notice provision makes the change in counsel painfully clear:
King & Spalding’s Jack Capers (Vanderbilt BA, Georgia JD) is out and Cadwalader’s Dennis Block (SUNY Buffalo BA ‘64, Brooklyn LLB ‘67) is in. Capers was also assisted by litigator Dick Cirillo (Yale BA, Fordham JD) and Robert Finley (Rochester BA ‘73, Syracuse JD ‘76). Cirillo and Finley sit in New York; Capers is in Atlanta.
We’re not surprised another lawyer, particularly someone like Block, would step in here. The guy has already done every sort of vanilla deal, including a quarter-trillion dollars’ worth of pharma deals, so he’s probably in it for the challenge. Wachtell has no interest in a run-of-the-mill transaction because it’s the messes that are the most interesting, and Block could do a normal deal in his sleep.
Haynes and Boone stays on as counsel for Fertitta.
Tilman Fertitta, by the way, is cousins with Frank and Lorenzo Fertitta – the co-owners of the Ultimate Fighting Championship. Like his cousins, he owns a casino, too – his is the Golden Nugget, theirs are the Station Casinos.
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The Fertitta brothers had a business dispute, and decided to resolve it by having a fist fight in their hotel room.