Increases Per Share Cash Consideration Paid
to MTR Stockholders at Closing to $6.05
Increases Aggregate Cash Consideration
Available to MTR Stockholders at Closing by $5.0 Million
MTR’s Board of Directors Unanimously
Approves Amended Merger Agreement
Eldorado and Jacobs Entertainment, Inc.
Enter into a Support Agreement in Connection with MTR-Eldorado
Merger
MTR Gaming Group, Inc. (NasdaqGS:MNTG) (“MTR”) and Eldorado
HoldCo LLC (“Eldorado”) announced today that they have amended
the previously announced merger agreement (the “Merger Agreement”)
between the two companies to deliver greater cash consideration to
MTR stockholders and to increase the pro forma ownership of the
combined company by MTR stockholders. MTR’s Board of Directors has
unanimously approved the amended Merger Agreement.
Under the amended Merger Agreement:
- An additional $5.0 million of cash will
be available to MTR stockholders at closing in connection with
their optional cash elections, bringing the total cash
consideration payable to MTR stockholders to $35.0 million.
- The per share price payable in cash to
MTR stockholders in connection with their cash elections has
increased by $0.90 per share, from $5.15 to $6.05.
- The $5.0 million of additional cash at
closing will be funded by Eldorado.
- The implied per share value used to
calculate the merger consideration payable to members of Eldorado
will be increased from $5.15 per share to $6.05 per
share.
Pro forma for the transaction, the current MTR stockholders’
resulting equity ownership in a stronger, more competitive combined
company would be, assuming MTR stockholders elect to receive the
maximum amount of cash available, approximately 43.3% in the
aggregate (increased from approximately 39.3%) on a fully-diluted
basis while the various members of Eldorado would individually own
the balance of the combined company. The combined company will be
controlled by a board of seven directors, five of whom are expected
to be independent directors.
MTR and Eldorado also announced today that Eldorado and Jacobs
Entertainment, Inc. and its affiliates (collectively, the
“Jacobs Parties”) have entered into a support agreement pursuant to
which the Jacobs Parties have agreed to, among other things, vote
their shares in favor of the amended Merger Agreement and cooperate
and support Eldorado’s and MTR’s efforts to consummate the
transaction. The support covenants of the JEI Parties terminate
upon the occurrence of, among other things, the termination of the
Merger Agreement, the consummation of the transactions contemplated
by the Merger Agreement and MTR’s Board of Directors making an
“Adverse Recommendation Change (as defined in the Merger Agreement)
in accordance with the terms of the Merger Agreement.
Also, under the amended Merger Agreement, MTR agreed to, among
other things, increase the termination fee payable by MTR to
Eldorado in certain circumstances from $5.0 million to
$6.0 million and to increase the amount of expense
reimbursement payable by MTR to Eldorado in certain circumstances
from $500,000 to $1.0 million.
Consummation of the MTR-Eldorado merger remains subject to
various conditions to closing, including receipt of required
governmental approvals and adoption of the merger agreement by
MTR’s stockholders.
About MTR Gaming Group, Inc.
MTR Gaming Group, Inc. is a hospitality and gaming company that
through subsidiaries owns and operates Mountaineer Casino,
Racetrack & Resort in Chester, West Virginia; Presque Isle
Downs & Casino in Erie, Pennsylvania; and Scioto Downs in
Columbus, Ohio. For more information, please visit
www.mtrgaming.com.
About Eldorado HoldCo LLC
Eldorado HoldCo LLC is the parent company of Eldorado
Resorts LLC, an owner and operator of gaming properties in
Nevada and Louisiana. Eldorado Resorts’ properties include Eldorado
Reno, Eldorado Shreveport and Silver Legacy (a 50 / 50 joint
venture with MGM Resorts International). For more information,
please visit www.eldoradoreno.com, www.eldoradoshreveport.com and
www.silverlegacyreno.com.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These forward-looking statements are based on current
expectations of management of MTR and Eldorado and are subject to
uncertainty and changes in circumstances. These forward-looking
statements include, among others, statements regarding the expected
benefits of a potential combination of MTR and Eldorado, including
the expected effect of the merger on MTR’s and Eldorado’s financial
results and profile (e.g., free cash flow, earnings per share and
Adjusted EBITDA); the anticipated benefits of geographic diversity
that would result from the merger and the expected results of MTR’s
and Eldorado’s gaming properties; expectations about future
business plans, prospective performance and opportunities; required
regulatory approvals and the expected timing of the completion of
the transaction. These forward-looking statements may be identified
by the use of words such as “expect,” “anticipate,” “believe,”
“estimate,” “potential,” “should”, “will” or similar words intended
to identify information that is not historical in nature. The
inclusion of such statements should not be regarded as a
representation that such plans, estimates or expectations will be
achieved. There is no assurance that the potential transaction will
be consummated, and there are a number of risks and uncertainties
that could cause actual results to differ materially from the
forward-looking statements made herein. These risks and
uncertainties include (a) the timing to consummate a potential
transaction between MTR and Eldorado; (b) the ability and timing to
obtain required regulatory approvals (including approval from
gaming regulators) and satisfy or waive other closing conditions;
(c) the possibility that the merger does not close when expected or
at all; or that the companies may be required to modify aspects of
the merger to achieve regulatory approval; (d) the ability of MTR
and Eldorado to promptly and effectively integrate their respective
businesses; (e) the requirement to satisfy closing conditions to
the merger as set forth in the merger agreement, including the
termination or expiration of the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976; (f) the
outcome of any legal proceedings that may be instituted in
connection with the transaction; (g) the ability to retain certain
key employees of MTR or Eldorado; (h) that there may be a material
adverse change affecting MTR or Eldorado, or the respective
businesses of MTR or Eldorado may suffer as a result of uncertainty
surrounding the transaction; and (i) the risk factors disclosed in
MTR’s filings with the Securities and Exchange Commission (the
“SEC”), including its Quarterly Report on Form 10-Q for the quarter
ended September 30, 2013, which MTR filed on November 12,
2013, and (ii) the risk factors disclosed in the Proxy
Statement/Prospectus referenced below under “Additional Information
and Where to Find It.” Forward-looking statements reflect MTR’s and
Eldorado’s management’s analysis as of the date of this release,
even if subsequently made available by MTR or Eldorado on their
respective websites or otherwise. MTR and Eldorado do not undertake
to revise these statements to reflect subsequent developments,
except as required under the federal securities laws. Readers are
cautioned not to place undue reliance on any of these
forward-looking statements.
Pro forma and estimated numbers are used for illustrative
purpose only, are based upon information as June 30, 2013, are
not forecasts and may not reflect actual results.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
This communication is not a solicitation of a proxy from any
stockholder of MTR. In connection with the agreement and plan of
merger among MTR, Eldorado and certain of its affiliates (the
“Merger Agreement”), Eclair Holdings Company (“EHC”) filed with the
SEC, on November 4, 2013, a Registration Statement on
Form S-4, that includes a preliminary Proxy Statement of MTR
and a preliminary Prospectus of EHC (together with the Proxy
Statement, as amended, the “Proxy Statement/Prospectus”), as well
as other relevant documents concerning the proposed transaction.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THESE MATERIALS
AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION
ABOUT MTR, ELDORADO, EHC AND THE PROPOSED TRANSACTION. The
Form S-4, including the Proxy Statement/Prospectus, and other
relevant materials (when they become available), and any other
documents filed by MTR, Eldorado or EHC with the SEC, may be
obtained free of charge at the SEC’s website at www.sec.gov. In
addition, investors and security holders may obtain free copies of
the documents filed with the SEC by directing a written request to
“Investor Relations,” MTR Gaming Group, Inc., Route 2,
P.O. Box 356, Chester, West Virginia 26034 in the case of MTR,
or by accessing MTR’s website at www.mtrgaming.com under the
heading “About” and then “Investor Relations” and then under “SEC
Filings.”
PARTICIPANTS IN THE SOLICITATION
MTR, Eldorado, and EHC and their respective executive officers
and directors may be deemed to be participants in the solicitation
of proxies from the security holders of MTR in connection with the
proposed transaction. Information about MTR’s directors and
executive officers is available in MTR’s definitive proxy
statement, dated April 30, 2013, for its 2013 annual meeting
of stockholders. Other information regarding the participants and
other persons who may be deemed participants and description of
their direct and indirect interests, by security holdings or
otherwise, are contained in the Proxy Statement/Prospectus.
Additional information regarding the interests of those
participants and other persons who may be deemed participants in
the transaction may be obtained by reading the Proxy
Statement/Prospectus regarding the combination between MTR and
Eldorado.
MTR Gaming Group, Inc.John W. Bittner, Jr., (724)
933-8122Executive Vice President and Chief Financial
Officerjbittner@mtrgaming.comwww.mtrgaming.com
Mtr Gaming (NASDAQ:MNTG)
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