Landry’s CEO Tilman Fertitta says he’s looking at taking parts of restaurant, casino business public

Tilman Fertitta, chairman and CEO of Landry’s Inc., on Tuesday confirmed to CNBC that he is considering returning parts of his restaurant and gaming business to the public markets.

“You can do such bigger deals and there’s so much more opportunity when you have a stock book,” Fertitta said on “Power Lunch.” “We’ve tried to do some acquisitions in the last six months and have gotten beat out of every one of them by a public company because they can pay a larger multiple. So it’s something that I’m definitely looking at.”

Bloomberg first reported last week that Fertitta was weighing whether to take a “substantial” portion of his restaurant and casino portfolio public in a deal valued in the several billions of dollars. Houston-based Landry’s restaurant properties include Bubba Gump Shrimp Co. and Morton’s The Steakhouse. Fertitta also owns the Golden Nugget Casino and Hotel brand.

Wall Street has mounted a strong rally from coronavirus-driven lows in late March, and investors have been hungry for initial public offerings after the pandemic slowed the deals market in the spring. There also has been a rush of companies going public in 2020 through special purpose acquisition companies, or SPACs.

“Because IPOs are so hot right now and the size of my business and the restaurant industry and the gaming industry is something that people would want to own … I’ve listened to bankers, and they’ve said some very intriguing things,” Fertitta said.

The billionaire first took Landry’s public in 1993, at which point the company had nine restaurants, according to the Houston Chronicle. He returned Landry’s to the private markets about a decade ago.

“I enjoy being public. It’s fun, and the competitiveness of quarter to quarter and year to year,” he said Tuesday. Fertitta also owns the NBA’s Houston Rockets, but the basketball franchise would not be part of any deal to go public, according to Bloomberg.

While the restaurant industry has been one of the hardest-hit sectors of the economy during the pandemic, Fertitta said Landry’s has seen an improvement in its business. “We had a very good third quarter, when you really look at what’s happening in the world,” he said.

Fertitta has previously expressed optimism about the future for restaurants after the pandemic ends, telling CNBC in September that 2022 “could be a spectacular year” in part because operators have learned how to be more profitable. He repeated that outlook Tuesday.

“There’s going to be great opportunity coming out of this pandemic, just like it was coming out of the 90s in Texas and 2000 and then the 2008 recession. We’ve done well in those times,” Fertitta said. “We see it as an opportunity.”

Another one of Fertitta’s companies, Golden Nugget Online Gaming, is set to go public through a SPAC. The reverse merger with Landcadia Holdings II was announced in June, and its board is set to meet Dec. 18 to approve the combination, according to a filing with the Securities and Exchange Commission. Following approval, Golden Nugget Online Gaming will become listed on the Nasdaq under the ticker symbol GNOG. Fertitta will continue serving as chairman and CEO.