Landry's CEO Gets Real

Tilman Fertitta, CEO of Landry's Restaurants, has finally admitted something that investors figured out weeks and even months ago: His $415 million buyout bid for the company was ridiculously high.

Fertitta has told his board that the bid is in jeopardy because getting it financed will be next to impossible.

The offer, made in June, was $21 a share. The stock had dropped from about $19 a share more than a month ago to $13.11 before Fertitta made his statement. It sank another couple of bucks on Tuesday.

Fertitta said he is talking to a bank, Jeffries & Co., about possibly financing a "substantially reduced" deal.

Fertitta made his offer—which would have included assuming $885 million in debt—in June to buy the 61 percent of the company that he doesn't already own.

The casual dining sector has been hit hard by the credit crunch, by rising costs, and by severely reduced traffic as cash-strapped diners opt to eat at home or at fast-food eateries. Debt-financed chains are under particular pressure because they can't make investments needed to increase demand in a crowded market.

Besides its eponymous restaurants, Landry's operates Crab House and Rainforest Café outlets.