Smith & Wollensky Snapped Up

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Say goodbye to Smith & Wollensky (Nasdaq: SWRG).

The upscale steakhouse accepted a buyout offer this morning, selling out to privately held Patina Restaurant Group for $9.25 a share. Patina runs several chic eateries in Southern California and New York City, as well as the Pinot Brasserie at the Venetian in Las Vegas.

It's a fitting end for a company that has disappointed investors since its IPO six years ago. This morning's pop in price is actually the first time that Smith & Wollensky shares have traded above their $8.50 IPO price!

Quite frankly, it was time for Smith & Wollenksy to go. The company's financials were never as sizzling as its signature steaks. The company was able to expand and grow sales at the unit level, but profitability was about as hard to come by as a veggie plate at the carnivore haven.

The overall steakhouse niche didn't fall into the same trap. Ruth's Chris (Nasdaq: RUTH), Morton's (NYSE: MRT), and Capital Grille parent RARE Hospitality (Nasdaq: RARE) have been consistently profitable. Smith & Wollensky's financial shortcomings set it apart in this space.

Still, Smith & Wollensky wasn't exactly unloved. The bidding war began when Landry's (NYSE: LNY) offered an unsolicited $7.50 a share for the company last month. The company announced that it would explore the bid, which no doubt raised the call for potential suitors.

The market was already betting on a higher offer. The stock closed at $8.20 over the weekend, well above the original Landry's bid. The upscale concept has always had potential; perhaps its new private owners can unlock that promise.

Farewell, Smith. Adios, Wollensky. May your future be tender, and not as red in the middle.

Other juicy stories to chew on:

• Smith & Whatever
• Landry's Is Hungry Again
• Wishing on a Star, Steak Lovers

Longtime Fool contributor Rick Munarriz enjoys a good steakhouse every now and then, and relishes having a Smith & Wollensky in town. He does not own shares in any of the companies mentioned in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.