A little more than a year after their purchase of the Golden Nugget 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 Restaurants.
The 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.
“The Golden 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.”
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In 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.
“We’re 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. The Golden Nugget has 1,907 rooms, a 40,000-square foot Qiu Qiu Online and 2,900 employees.
The transaction is subject to approval by Nevada gaming regulators and is expected to close by the end of the year.
Poster 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 Mirage.
In November, they agreed to sell the Laughlin property to Barrick Gaming Corp. for $31 million.
Gaming sources said Poster and Breitling could split up to $150 million in profits once the transaction closes.
“I 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.”
The casino’s most recent earnings were mixed, and gaming analysts said the property suffered from poor cash flow.
“I 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.
Poster 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.”
Throughout 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.
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