Full House Resorts Incorporated rejects takeover approach

American regional casino operator, Full House Resorts Incorporated, has rejected a proposal from Z Capital Partners that could have seen that the private equity management firm pay roughly $132.5 million to be able to acquire all its issued stock.

Unanimous refusal:

In a official Tuesday letter delivered to James Zenni, Chief Executive Officer for Z Capital Partners, Full House Resorts Incorporated announced that its board of directors had ‘reluctantly determined’ the planned deal was ‘not in the best interests’ of their Las Vegas-established firm or its shareholders.

Full House Resorts Incorporated operates five casinos in four countries such as Stockman’s Casino in american Nevada as well as southern Indiana’s Rising Star Casino Resort and its correspondence also said that the takeover offer from Z Capital Partners hadn’t given ‘a transaction structure’ or supplied ‘evidence of funding. ’

Undervaluation concerns:

The target of this takeover utilized its letter to announce the deal from Z Capital Partners ‘dramatically undervalues’ its enterprise and did not reflect its ‘tactical significance and future prospects. ’ Full House Resorts Incorporated’s rebuff explained the proposal represented a 35% reduction when compared with its actual value and ‘reflects a crude and basic disconnect’ to its valuation by ‘third-party analysts and investors. ’

Read the correspondence from Full House Resorts Incorporated…

“Our board and management team see substantial upside to the organization ’s present and current trading costs based on already-completed capital projects across our existing portfolio as well as established or prospective organic growth opportunities in Colorado, Indiana and also New Mexico, among other places. ”

Possible ‘implementation ’ hurdles:

New York City-headquartered Z Capital Partners had shown in its Monday provide it desired to unite Full House Resorts Incorporated with its Affinity Gambling subordinate post-acquisition so as to make an enterprise that was to blame for 16 casinos in six countries. But, its target additionally used its letter to describe any such merger could be subject to ‘significant implementation risks’ thanks to multiple ‘jurisdictional overlaps’ involving both gambling companies.

Read the correspondence from Full House Resorts Incorporated…

“Our board and management team collectively own approximately 17 percent of Full House Resorts Incorporated’s shares and our greatest priority is producing value for the organization ’s stockholders. According to our review, we’re fully confident that our strategic plan will provide value to our stockholders far superior to this value your letter suggests. Thus, our board doesn’t have any interest in pursuing exactly what you suggest. ”