Exclusive: Landry's and Jefferies CEOs to launch acquisition company

Tue Apr 26, 2016 3:53am EDT
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By Lauren Hirsch, Olivia Oran and Mike Stone

(Reuters) - Tilman Fertitta, the Texas billionaire CEO of Landry’s Inc and Richard Handler, the CEO of investment bank Jefferies Group LLC and its parent Leucadia National Corp (LUK.N: Quote), are launching a special purpose acquisition company (SPAC) through their companies, people familiar with the matter said.

The SPAC will be called Landcadia, a combination of the names Landry's and Leucadia, and plans to raise as much as $300 million in an initial public offering (IPO), the people said.

SPACs, also known as blank-check acquisition companies, have no assets but use IPO proceeds, together with bank financing, to buy other companies and boost their value through operational improvements.

Landcadia will use the money it raises to fund a corporate acquisition in the hospitality, gaming or restaurants industries, the sources said. Jefferies and Deutsche Bank AG (DBKGn.DE: Quote) are working on the IPO of Landcadia, which has already been registered confidentially with the U.S. Securities and Exchange Commission, the people added.

The sources asked not to be identified because Landcadia is still a confidential project. Deutsche Bank, Jefferies, Leucadia and Landry's declined to comment.

This year has seen a string of high-profile executives seeking to launch SPACs. In February, oil and gas titan Mark Papa raised $450 million in a SPAC IPO. Last week, former Blackstone Group LP private equity dealmaker Chinh Chu and Fidelity National Financial FNF.N Chairman William Foley unveiled a SPAC that could raise up to $1.1 billion, making it the largest on record.

Handler and Fertitta have a longstanding friendship. According to a Forbes article from 2012, Jefferies helped finance Landry’s debt in 2007. Fertitta's Instagram account includes several recent photos of the two men, including one of them riding the subway during New York City rush hour and another having dinner with soccer star Pelé at Handler's New York City penthouse.

Handler has been CEO of Jefferies for 15 years, at times serving as one of the highest paid executives on Wall Street. Last year, Handler turned down a bonus after Jefferies had a lackluster 2014.   Continued...

Tilman J. Fertitta speaks at a panel for the television series "Billion Dollar Buyer" during the NBCUniversal summer press day in Westlake Village, California, April 1, 2016. REUTERS/Mario Anzuoni