Landry's to Buy Golden Nugget Casino in Vegas

Seafood chain Landry's Restaurants Inc. (LNY) said on Friday it would jump into the gambling business with the purchase of the storied Golden Nugget Casino (search) in Las Vegas for $140 million.

Landry's shares jumped nearly 13 percent after the news.

The deal for the Golden Nugget, which once featured headliners like Frank Sinatra (search) and more recently was featured as the center of the Fox television reality series "The Casino," is expected to close in the next 12 months, current owner Poster Financial Group said in a news release.

Houston-based Landry's, which owns casual and fine dining, hospitality and aquarium properties, will also assume $155 million in debt as well as certain working capital liabilities in the deal.

"We believe the property has excellent upside potential and will be accretive to our 2006 earnings," said Chief Financial Officer Rick Liem in a statement.

The Golden Nugget, a symbol of the old-time Las Vegas that has been overshadowed in recent years by the construction of casinos modeled after places like New York, Paris and Egypt, occupies more than eight acres in downtown Las Vegas with about 40,000 square feet of gaming area.

It also has three hotel towers with almost 2,000 rooms.

The casino was founded in 1946, with casino entrepreneur Steve Wynn (search) taking a controlling interest in 1972. The casino was acquired by MGM Grand 28 years later and was purchased along with a second property last year by Tim Poster and Tom Breitling, founders of travel Web site

Their attempts to raise the casino's profile were chronicled in the Fox reality show "The Casino."

Landry's shares were up $3.66 at $32.07 on the New York Stock Exchange (search).