Morton's Leads IPO Crush

Updated from 7:56 a.m. EST

Morton's Restaurant Group (MRT Quote) returned to Wall Street Thursday with the latest initial public offering in the restaurant sector.

Its shares recently were up 89 cents, or 5.2%, to $17.89. The stock reached as high as $20.25 in earlier trading.

The chain of upscale steakhouses traded publicly for 10 years until it was acquired in 2002 by Castle Harlan, a private equity group founded by John Castle, who is a director on Morton's board. Activist investor Carl Icahn, currently waging a battle with management at Time Warner (TWX Quote), was the loser of an extended bidding war for the company.

Castle Harlan now owns 31.2% of Morton's, a chain of 69 restaurants, 65 of which are in the U.S.

When it was taken private during the period of economic malaise following the tech-bubble burst and the terrorist attacks of Sept. 11, 2001, the chain was only a few stores smaller than it is now. The company recently named its chief financial officer, Thomas Baldwin, as CEO to replace Allen Bernstein, who retired in December after leading the company for 18 years.

Morton's plans to open four or five new locations this year, according to its prospectus, and then grow by five to seven stores in both the U.S. and abroad for the next several years.

For the first nine months of its fiscal 2005, Morton's had pro forma earnings of $5.7 million, or 35 cents a share. For all of fiscal 2004, it earned $5.3 million, or 33 cents a share.

Its latest IPO comes at a time when the market is showing an appetite for new issues. In January, shares of McDonald's (MCD Quote) spinoff Chipotle Mexican Grill (CMG Quote) doubled in their first day of trading. The trendy burrito chain is expected to be a growth machine.