In a last-minute twist in the sale of bankrupt Granite City Food & Brewery Ltd., Tilman Fertitta has outbid the parent of STK and Kona Grill for Granite City’s Cadillac Ranch business. Fertitta’s Landry’s holding agreed to buy the three-unit operation for $7.5 million, according to bankruptcy court documents.
The One Group, operator of STK and Kona, had bid $3 million.
BBQ Holdings, the parent of the Famous Dave’s barbecue chain, remains the winning bidder for Granite City’s namesake 25-unit brewpub chain, with an offer of $3.65 million. Landry’s had shown interest in also buying the Granite City business, but halted its bidding at $3.6 million after the high offer changed 60 times, rising each time by at least $50,000, according to court filings.
The court filings reveal that BBQ had originally bid $11.1 million for all of Granite City—its namesake brand, the Cadillac Ranch business and related assets such as a brewery operation. Court-approved officials monitoring the sale decided at that time to exercise an option to conduct separate auctions for the Cadillac and Granite City brands. The three contenders for the bankrupt company’s total assets were invited to submit new bids for the components.
The court documents describe a lively bidding process between One Group, Landry’s and BBQ. A fourth bidder interested in all of Granite City, Denver-based private-equity group KRG Capital Partners, had dropped out of the competition by that time.
The auction for Cadillac Ranch took about an hour, the court papers state. Monitors of the sale determined that the separate sales of Cadillac Ranch and the Granite City brand would net more proceeds, and approved the dual-auction results, or roughly $11.2 million in total.
About $4.7 million of the money raised will be paid to Sysco, Granite City’s broadline distributor, according to the court documents.
The deal marks Fertitta’s second bid for a restaurant brand in roughly a week. Documents released last week by the bankruptcy court overseeing The Palm steakhouse chain revealed that Fertitta’s Golden Nugget casino business had submitted a $50 million offer to buy the 24-unit upscale brand.
Granite City's parent company filed for Chapter 11 bankruptcy protection in mid-December, citing the ill effects of the downturn in shopping mall traffic and the industrywide surge in delivery. The company said the competition with home dining left it at a disadvantage. It closed seven restaurants before the filing.
Correction: An earlier version of the story stated that Landry's was buying all four of the Cadillac Ranch units that are currently in operation. Only three of the restaurants are being acquired, according to a spokesperson for the company.
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