BusinessWeek: January 11, 1993

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Inside Wall Street

...AND A STEAK PURVEYOR SIZZLES

Steak houses have been quite popular on Wall Street, despite the sharp decline in beef consumption. Take Quantum Restaurant Group, which owns and operates 42 restaurants in 13 states, including 20 upscale steak houses called Morton's of Chicago. Quantum, which was initially offered in June at 10 a share, heated up to 18 by November.

The stock's IPO success so thrilled Quantum founder and Chairman Allen Bernstein that Quantum did a second offering in December--this time, at 15 1/4. Some analysts remain upbeat despite the creation of more shares. Shearson Lehman Brothers analyst Caroline Levy calls the stock, currently at 15, a "strong buy," and she expects it to hit 20 sometime next year. Shearson, along with Alex. Brown & Sons and Montgomery Securities, underwrote the two offerings.

Quantum also operates 10 Mick's restaurants, which feature hamburgers, pasta, and sandwiches at moderate prices. Quantum also owns 11 white-tablecloth Peasant Restaurants in Atlanta and Washington. And the company recently opened an Italian eatery in Las Vegas called Lombardi's.

Bernstein says Quantum plans to open at least 50 additional Morton's of Chicago restaurants in the U.S. and overseas over the next several years. He has been talking with Japanese and French owners of hotels in Honolulu, Paris, Singapore, and Tokyo for licensing agreements. Bernstein wouldn't say, however, whether the Japanese or French interests would buy an equity stake in Quantum.

Veteran restaurant analyst Roger Lipton figures the company earned 58 a share in 1992 and will earn $1 in 1993.

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