VEGAS, Nevada -
A little more than a year after their purchase of the
landed Tim Poster and Tom Breitling on the front pages
of national publications and in their own reality TV series,
the dot-com millionaires agreed to part ways with the
historic downtown casino Friday, accepting $295 million
in cash and debt assumption from Houston-based Landry's
transaction gives Landry's, the operator of more than
300 restaurants nationwide under such brands as Landry's
Seafood House, Rainforest Cafe and Joe's Crab Shack, its
first gaming property and a brand name the company hopes
to introduce into different casino jurisdictions.
Nugget name is a great brand, and it's one that allows
us to expand into other markets," said Tilman Fertitta,
Landry's chairman and chief executive officer. "It's
a great property, and we believe it is a name we can roll
out and build upon as we have with our restaurant brands."
addition to exploring additional gaming purchases outside
of Nevada, Fertitta said Landry's is considering making
a bid to purchase the Riviera on the Strip, which some
analysts believe is a prime takeover target.
still looking at the Riviera,
but we're not ready to make an offer," Fertitta said.
Landry's will pay Poster Financial Group $140 million
in cash while assuming the casino's $155 million in debt.
has 1,907 rooms, a 40,000-square foot casino and 2,900
The transaction is subject to approval by Nevada gaming
regulators and is expected to close by the end of the
and Breitling earned their initial fortune by founding
the travel Web site Travelscape.com, which was later sold
to Expedia. The pair made their way into gaming in January
2004 after closing on a $215 million purchase of the Golden
Nugget properties in Las Vegas and Laughlin from MGM
November, they agreed to sell the Laughlin property to
Barrick Gaming Corp. for $31 million.
sources said Poster and Breitling could split up to $150
million in profits once the transaction closes.
spoke with Tim Poster this the morning, and he told me
they had an offer you couldn't refuse," Mayor Oscar
Goodman said of the transaction in which one of downtown's
key gaming destinations could be changing owners for the
second time in two years. "I love Tim and Tom, and
they brought a tremendous amount of attention to downtown.
They told me they are committed to downtown."
casino's most recent earnings were mixed, and gaming analysts
said the property suffered from poor cash flow.
think operating a casino was a little different than they
expected," said gaming analyst Steve Ruggiero of
CRT Capital Group. "But they got a great price, and
Landry's is getting a great property."
Ruggiero said Landry's might be a good fit for the Riviera,
but it would take a tremendous amount of capital to revive
the older Strip property.
and Breitling were not available for comment on the Golden
Nugget sale, saying only in a statement the transaction
will allow Poster Financial Group to "participate
in various business opportunities."
their brief ownership, Poster and Breitling said they
wanted to return the Golden
Nugget to the heyday of the Rat Pack. They embarked
on a nationwide marketing campaign that included ads in
Esquire, GQ, Conde Nast Traveler, Cigar Aficionado and
Sports Illustrated to introduce the gaming public to the
resort's new owners and their efforts to revive "Vintage
Vegas" in downtown.
anything, the flashy, mid-30s, first-time casino owners
were headline grabbers.
apex of their public relations savvy saw them take part
in the Fox reality television show, "The Casino."
Created by Mark Burnett, the program was panned by critics
and finished the year ranked 177 out of the 279 programs
in the Nielsen ratings.
addition to its restaurants, Landry's owns the Inn at
the Ballpark, a hotel adjacent to Houston's Minute Maid
Park and the city's downtown Aquarium.
said the company plans to participate in downtown redevelopment.
"Landry's will take part in the downtown revitalization
because we're excited about being part of the community,"
said Fertitta, who expressed the same sentiment in a morning
phone call to Goodman.
Fertitta, 46, is a cousin of Frank and Lorenzo Fertitta
of Station Casinos. The local gaming giant will not have
a role in the Golden
operators and we believe there is a good management team
already in place at the Golden Nugget," Fertitta
said. "We do a good job operating our restaurants,
and we will bring that same type of service to gaming.
Station is a good company, and they were the first to
call this morning congratulating us on the deal, saying
we could call any time for advice."
operated by Steve Wynn, the Golden
Nugget has undergone several changes under the current
owners, including new restaurants and updates to the casino.
said the company was attracted to the property because
it needs little in the way of capital improvements.
Nugget employees learned of the proposed sale throughout
the day. Zachary Conine, a property spokesman, said the
matter "was just another interesting event in the
questioned Friday didn't want to be named, and several
just shrugged off the matter as hotel guests began arriving
for the busy Super Bowl weekend.
not too concerned," said one cocktail server.
was founded by Fertitta in 1986. The company went public
in 1993, the same year his cousins took Station Casinos
public. In the company's most recent earnings, Landry's
reported total revenues of $314.4 million for the quarter
that ended Sept. 30.
Smith, a restaurant industry analyst for Oppenheimer,
said Landry's executives discussed getting into the gambling
business during the company's two most recent conference
calls. He said bank loans, a revolving line of credit
and funds raised through the bond market give Landry's
more than $500 million it could spend on casino purchases.
Tilman, maybe it's a way of growing cash flow," Smith
said. "They can acquire talent to run the casinos,
and I think he looked at the math and sees gaming as another
way to expand the company."
called gaming "a growth industry," saying operating
one casino could have the same value as 40 restaurants.
Landry's operates four restaurants in Las Vegas; a Landry's
Seafood on West Sahara Avenue across from Palace Station,
two Joe's Crab Shacks and the Rainforest Cafe inside the