Bubba Gump Shrimp owner to buy Morton’s steakhouse chain

Storied -– and expensive -– Chicago steakhouse chain Morton’s Restaurant Group Inc. is going private in an acquisition by Bubba Gump Shrimp and Rainforest Cafe owner Tilman J. Fertitta.

Fertitta’s company, Houston-based Landry’s Restaurants Inc., will buy Morton’s for $6.90 a share, a 34% premium on Thursday’s $5.16 closing price. That's about $117 million total.

The upscale steakhouse chain has a glittering past, including 14 years as the host to Vanity Fair’s famed Oscar party in West Hollywood. There are 11 Morton’s locations in California.

Morton’s board of directors has unanimously approved the deal, which Fertitta plans to finance through cash and debt and which is expected to close in early February. In midday trading Friday in New York, Morton’s shares were up 32.6% to $6.84.

Last month, Landry’s scooped up McCormick & Schmick’s Seafood Restaurants for $131.6 million after months of hostile takeover attempts.

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-- Tiffany Hsu

Photo: A 48-ounce porterhouse steak at Morton's in Santa Ana. Houston-based Landry’s Restaurants Inc. will buy the Morton’s chain. Credit: Robert Lachman / Los Angeles Times

SEC accuses Stiefel Laboratories of defrauding employee shareholders

The Securities and Exchange Commission has accused a subsidiary of GlaxoSmithKline and the subsidiary’s former chief executive of defrauding employees and other shareholders by buying back the company’s private stock at severely undervalued prices.

In a lawsuit filed in federal court in Florida, the SEC accused Stiefel Laboratories Inc. and former chairman and Chief Executive Charles Stiefel of withholding information from shareholders in order to acquire their shares at bargain prices.

Among several accusations, the SEC said Stiefel falsely told shareholders that the company would remain family-owned when he was actually negotiating the sale of the company to GlaxoSmithKline.

Amid the acquisition talks from December 2008 to April 2009, Stiefel’s company bought more than $13 million worth of stock from shareholders. When Stiefel announced it was being acquired by GlaxoSmithKline on April 20, 2009, those shares gained more than 300% in value, the SEC said.

“Stiefel Labs and Charles Stiefel profited at the expense of their employee shareholders who lost more than $110 million by selling their stock based on the misleading valuations they were provided,” said Eric I. Bustillo, director of the SEC’s Miami office. “Private companies and their officers must understand that they are not immune from the federal securities laws, which protect all shareholders regardless of whether they bought stock in the open market or earned shares through a company’s stock plan.”

Based in Coral Gables, Fla., Stiefel was the world’s largest private manufacturer of dermatology products before its acquisition by GlaxoSmithKline, the SEC said.

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-- Stuart Pfeifer

Photo: GlaxoSmithKline factory in Puerto Rico Credit: Brennan Linsley / Associated Press

Judge grants stay in antitrust case as AT&T rethinks T-Mobile deal

U.S. District Ellen Segal Huvelle on Monday granted a stay in the government's antitrust lawsuit that is seeking to block AT&T Inc.'s $39-billion purchase of T-Mobile USA.

The move to postpone pre-trial activity until mid-January came after AT&T and Deutsche Telekom, T-Mobile's German parent, joined the Justice Department in asking for the stay earlier in the day. The companies said Monday they were "actively considering whether and how to revise" the telecommunications deal. A trial in the case had been scheduled for February.

Huvelle's order said the companies must provide by Jan. 12 a report "describing the status of their proposed transaction, including discussion of whether they intend to proceed with the transaction at issue in this litigation, [and] whether they intend to proceed with another transaction."

AT&T and Deutsche Telekom also must provide their plans to seek regulatory approval from the Federal Communications Commission. Huvelle will hold a hearing on the case six days later.

AT&T had withdrawn its application with the FCC after the agency's staff issued a report last month that found the deal was not in the public interest. The Justice Department cited that withdrawal in a hearing on Friday, arguing that the lawsuit no longer needed to be expedited. The antitrust case is scheduled for a February trial.

AT&T and Deutsche Telekom said they asked for the stay "to evaluate all options."

Public Knowledge, a consumer advocacy group that opposes the deal, said AT&T and Deutsche Telekom should pull the plug.

"We hope that AT&T will take the contemplative time over the holidays to realize that it should now call the transaction to an orderly halt," said Harold Feld, the group's legal director. "It is time for AT&T to end this now and save everyone a lot of time and money for a case it cannot win."

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-- Jim Puzzanghera in Washington

Nara and Center merge to form BBCN, largest Korean American bank

Center Financial Corp.'s merger into onetime Koreatown rival Nara Bancorp Inc. will create the largest U.S. bank focused on the ethnic Korean market, an institution with nearly $5.3 billion in assets that will be named BBCN Bank.

The parent companies of Center Bank and Nara Bank were scheduled to announce completion of their merger on Wednesday afternoon. BBCN will be the seventh-largest bank based in Los Angeles County, with $4.4 billion in deposits and 40 branches in California, New York, New Jersey, Seattle and Chicago.

The banks, like many other Asian American institutions, have specialized in loans to smaller businesses. About half of their assets are in commercial mortgages, a banking sector whose losses during the recession have increased pressures on the ethnic banks to consolidate.

They announced plans to merge last December, with Center shareholders receiving about $270 million in Nara stock. Alvin Kang, Nara's chief executive, will become chief executive of the merged bank.

The new name derives from Business Bank of Center and Nara, a name that was under consideration but lost out to the shorter BBCN.

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--E. Scott Reckard

 

Photo: Nara Bank is merging with Center Bank to create BBCN Bank. Credit: Los Angeles Times  

Consumer Confidential: AT&T merger, incomes up, car deals

Here's your what's-new-pussycat Wednesday roundup of consumer news from around the Web:

-- AT&T's proposed $39-billion merger with T-Mobile is hitting new roadblocks. Federal Communications Commission Chairman Julius Genachowski is seeking a review of the deal, arguing that it would significantly diminish competition and lead to massive job losses. The agency also concluded that the merger would not result in significantly more buildout of next-generation 4G wireless service than would occur without the transaction. AT&T argues the deal will accelerate its expansion of high-speed wireless service to nearly all Americans. The U.S. Justice Department went to court in August to oppose AT&T's purchase of T-Mobile on antitrust grounds. (Reuters)

-- In a sign that holiday shopping may be stronger than expected, consumers barely increased their spending in October but their incomes rose by the most in seven months. The Commerce Department says spending increased 0.1% last month, the poorest gain in four months. But incomes increased 0.4%, the best showing since March. Private wages and salaries drove the income gain. The slight October gain in consumer spending represented a big slowdown from a 0.7% September increase. Spending on durable goods such as autos showed a solid increase, but spending on nondurable goods such as food and clothing fell. (Associated Press)

-- In the market for a new car? Black Friday's the ticket. Based on sales data for the last 10 years, plus current market conditions, the website TrueCar estimates that discounts of more than 20% will be available Friday on some models. The discounts result partly because Black Friday is near the end of the month, when dealers push to meet their monthly sales quotas. And manufacturers already are offering their year-end rebates and other incentives to clear out the 2011 model year. Most of the best deals are on remaining 2011 models, like the 22% discount projected by TrueCar for the Chevy Silverado 1500 pickup, selling for an average $17,370 including a $4,500 rebate from General Motors. (MoneyWatch)

-- David Lazarus

Photo: The FCC wants a closer look at AT&T's merger with T-Mobile. Credit: Stephen Yang/Bloomberg

San Diego Union-Tribune sold to hotel magnate Doug Manchester

The San Diego Union-Tribune is being sold to MLIM, owned by local hotel magnate Doug Manchester, said current owner Platinum Equity.

Terms of the deal weren’t disclosed by Los Angeles-based Platinum,  which bought the 143-year-old newspaper from Copley Press in 2009. The acquisition is expected to close by Dec. 15.

MLIM is headed by chief executive and longtime radio station owner John Lynch, who founded the Broadcast Co. of America and once worked for the Chicago Tribune. 

In its two and a half years of ownership, Platinum attempted to modernize the Union-Tribune’s print and online operations, the private equity investment firm said Thursday. The newspaper has an average circulation of 219,347, ranking it 25th on the list compiled by the Audit Bureau of Circulations.

“We came here at a difficult time for the newspaper industry and helped the Union-Tribune successfully transform its operations and reinvent itself,” said Louis Samson, a Platinum principal who led the 2009 acquisition effort. 

Readers were stunned by the announcement. “Chin hits floor,” tweeted Twitter user djduke. “Is this an early April Fool’s joke?” tweeted Whitney Benjamin. “Sad news folks,” tweeted Anne Cornetta.

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-- Tiffany Hsu

Photo: The San Diego Union-Tribune's headquarters in Mission Valley. Credit: San Diego Union-Tribune

The San Diego Union-Tribune is being sold to MLIM, owned by local hotel magnate Doug Manchester, said current owner Platinum Equity.

Terms of the deal weren’t disclosed by Los Angeles-based Platinum,  which bought the 143-year-old newspaper from Copley Press in 2009. The acquisition is expected to close by Dec. 15.

MLIM is headed by chief executive and long-time radio station owner John Lynch, who founded the Broadcast Company of America and once worked for The Chicago Tribune.  

In its two and a half years of ownership, Platinum attempted to modernize the Union-Tribune’s print and online operations, the private equity investment firm said Thursday.

“We came here at a difficult time for the newspaper industry and helped the Union-Tribune successfully transofrm its operations and re-invent itself,” said Louis Samson, a Platinum principal who led the 2009 acquisition effort.  

Readers were stunned by the announcement. “Chin hits floor,” tweeted Twitter user djduke. “Is this an early April Fool’s joke?” tweeted Whitney Benjamin. “Sad news folks,” tweeted Anne Cornetta.

Rainforest Cafe owner Landry's to buy McCormick & Schmick's

After months of hostile volleys, McCormick & Schmick’s Seafood Restaurants chain has succumbed to a takeover bid from Rainforest Cafe owner Landry’s Restaurants Inc.

In a deal valued at $131.6 million, Houston-based Landry’s will buy the seafood chain for $8.75 per share – a 29% premium above the McCormick’s closing price Monday.

The deal is expected to close next month or early next year.

Landry’s already owns Bubba Gump Shrimp Co., Claim Jumper and several hotels and casinos. It will take on the more than 80 restaurants operated by Portland, Ore.-based McCormick -– including McCormick & Kuleto’s in San Francisco and Spenger’s Fresh Fish Grotto in Berkeley.

Landry’s owner Tilman J. Fertitta, who is one of McCormick’s largest shareholders with more than 10% of the outstanding common stock, continued pursuing the seafood chain even after it rejected his initial overture in April.

McCormick, he said in a statement Tuesday, “fell victim to the need to grow and located some restaurants in secondary markets which were adversely impacted to a greater degree by the economic downturn.”

The seafood chain’s net income slipped 10% in the third quarter to $92 million from $102.4 million. Its stock was up nearly 28% in mid-day trading Tuesday to $8.65 a share.

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-- Tiffany Hsu

Photo: McCormick & Schmick's

Consumer Confidential: Toy firm fined; Hertz goes it alone

Here's your throat-clearing Thursday roundup of consumer news from around the Web:

-- Federal regulators aren't kidding around when it comes to toy safety. The Consumer Product Safety Commission slapped a $1.3-million fine on a toy company that sold popular arts-and-crafts beads that were linked to a dangerous drug and sickened about a dozen children. The civil penalty marks the third largest toy-related fine issued by the agency. The Aqua Dots toy beads were imported by Spin Master in 2007 and recalled after tests showed they were coated with a chemical that, when ingested, can metabolize into the so-called "date-rape" drug gamma hydroxybutyrate (GHB). The compound can induce unconsciousness, seizures, drowsiness, coma and death.

-- Rental-car companies sure play hard to get. Hertz Global Holdings says it's withdrawing its offer for Dollar Thrifty, but is still interested in buying the rival rental car company. Hertz cited Dollar Thrifty Automotive Group's plan to buy back stock and current market conditions. This year, Hertz offered to buy Dollar Thrifty for $57.60 in cash and 0.8546 shares of Hertz stock for each Dollar Thrifty share. That was a sweetening of a previous offer made by the company last year and rejected by Dollar Thrifty shareholders. But Dollar Thrifty advised its shareholders against accepting Hertz's sweetened offer.

-- David Lazarus

 

Consumer Confidential: Thomas the Tank Engine bought, Harley recall

Here's your maybe-baby Monday roundup of consumer news from around the Web:

—Thomas the Tank Engine, meet Barbie. The company behind everyone's favorite talking train, Hit Entertainment, is being purchased by El Segundo's Mattel for $680 million in cash. Mattel already markets many Thomas & Friends die-cast and plastic toys under a license that extends until 2014. Global sales of those toys are more than $150 million. Mattel says the deal will help combine its own global marketing and distribution capabilities with Hit Entertainment's global programming and licensing expertise. For those without small ones at home, Thomas the Tank Engine is a popular British children's television series that has spawned a variety of tie-ins and toys.

—Wal-Mart has your number ... at least when it comes to prices. The world's largest retailer is announcing a new strategy that it hopes will pull in procrastinators early by giving them a big incentive: a guarantee that they'll get the lowest price no matter when they buy during the holiday season. Wal-Mart says it will be matching prices on many of its products. Shoppers who buy something at a Wal-Mart store between Nov. 1 and Dec. 25, but then find the identical product elsewhere for less, can get a gift card in the amount of the difference. The offer excludes merchandise bought on Wal-Mart's website and some other products, such as groceries.

—Heads up, hog riders: Harley-Davidson is recalling about 308,000 motorcycles to fix a switch problem that can cause failure of the brake lights and possibly even the rear brakes themselves. The company says in documents filed with the National Highway Traffic Safety Administration that brake light switches can be exposed to too much heat from the exhaust system. The heat can cause the brake lights to fail, and the problem also can cause fluid leaks and the loss of rear brakes. The problem affects Touring, CVO Touring and Trike motorcycles from the 2009 through 2012 model years.

— David Lazarus

Photo: Thomas the Tank Engine has a new daddy. Credit: BayBritt Allcroft

Consumer Confidential: Rental cars, JetBlue offer, Easy-Bake Oven

Here's your Wee-Willie-Winkie Wednesday roundup of consumer news from around the Web:

--Avis Budget Group says it's dropping its $1.55 billion bid to acquire rival Dollar Thrifty. Avis and Hertz Global Holdings, the two largest publicly traded U.S. auto-rental chains, have been seeking  Federal Trade Commission approval of their competing bids for Dollar Thrifty, the fourth-largest rental-car company in the U.S. market. Hertz says it will press ahead with its own merger plans. Dollar Thrifty told Avis and Hertz on Sept. 7 that it wanted final offers by Oct. 10. Dollar Thrifty shareholders so far haven't liked the offers they've received. That may change now that Avis is out of the picture.

--JetBlue doesn't want Hurricane Maria slamming passengers in the wallet. The airline says it will waive ticket-change fees for people who rebook flights to or from Bermuda on Thursday to avoid the storm. JetBlue says customers can reschedule for travel through Saturday by calling the airline before their scheduled departure time. Passengers whose flights are canceled and who bought their ticket on or before Tuesday can get a refund, the company says.

--This isn't your mother's Easy-Bake Oven. The latest version of the famous toy first marketed in 1963 is now all curves and purple and snazzy graphics. And it comes with a new instruction: No light bulb necessary. The compact fluorescents that are becoming the new standard for household use are so energy-efficient that they're useless for baking a brownie, or any other miniature treats. So now the Easy-Bake boasts an actual heating element much like that of a traditional oven. The Easy-Bake Ultimate Oven is clearly designed to fit on any kitchen counter, assuming a parent is willing to shell out $49.99 for the gadget. As for its performance, I await the verdict of a new generation of Easy Bakers.

-- David Lazarus

Photo: Avis says it'll drive solo, dropping its bid for Dollar Thrifty. Credit: Richard Derk / Los Angeles Times

First PacTrust to acquire Beach Business Bank of Manhattan Beach

First PacTrust Bancorp, the parent of Chula Vista's Pacific Trust Bank, has agreed to acquire Beach Business Bank, a Manhattan Beach community bank with a specialty sideline of lending to physicians across the country.

The deal, expected to close early next year, continues an expansion into Los Angeles and Orange counties for First PacTrust, which raised $28 million in fresh capital this summer by selling stock.

First PacTrust also is acquiring Gateway Business Bank, a three-branch bank based in Cerritos that operates home-lending offices across California, Oregon and Arizona through its Mission Hills Mortgage Bankers arm.

In a joint statement Wednesday morning, First PacTrust and Beach Business Bank said their boards had OK'd the deal, which also requires approval by Beach shareholders and regulators.

Assuming that goes as planned, Beach shareholders are to receive combinations of cash and stock or cash and stock warrants with a total value of $37.2 million, the statement said.

The deal adds up to $9.07 for each share of Beach Business Bank stock. The closely held shares had traded in the $16 range in late 2006 and early 2007, before the financial crisis struck.

They had been changing hands at about $6 in recent over-the-counter trading and shot up to $8.60 after the deal was announced, a 45% gain.

Besides its Manhattan Beach headquarters, Beach has full-service branches in Long Beach and Costa Mesa and a lending office in Torrance.

It is to continue operating under its own name, with its chief executive, Robert M. Franko, becoming president of First PacTrust Bancorp. Franko said the merger would "result in a stronger bank with the capital strength and scale to continue to expand into new markets."