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Change in the merger agreement between MTR Gaming and Eldorado

Mtr casino groupUS horseracing and casino operator MTR Gaming Group and casino operator Eldorado Resorts have confirmed that they have amended the previously announced merger between the two companies.

The firms said the amendments would help deliver greater cash consideration to MTR stockholders as well as increase the pro forma ownership of the combined company by MTR stockholders.

The MTR board of directors unanimously approved the changes to the agreement.

Under the amended agreement, an additional $5 million (€3.7 million) will be available to MTR stockholders at closing in connection with their optional cash elections, bringing the total cash consideration payable to them to $35 million.

The additional $5 million will be funded by Eldorado Resorts.

In addition, the per share price payable in cash to MTR stockholders in connection with their cash elections has been increased by $0.90 per share to $6.05.

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.

If MTR stockholders elect to receive the maximum amount of cash available, it would increase the aggregate from 39.3% to 43.3% on a fully diluted basis. Members of Eldorado would individually own the balance of the combined company.

In addition, MTR and Eldorado have also announced that Eldorado and Jacobs Entertainment and its Jacobs Parties affiliates have entered into a support agreement.

Under the deal, Jacobs Parties have agreed to vote their shares in favour of the amended merger agreement and support and co-operate Eldorado’s and MTR’s efforts to consummate the deal.

They support also covenants of the Jacobs Parties terminate if the merger agreement is terminated, transactions set out in the agreement are consummated, and the MTR board making an “adverse recommendation change” in accordance with the terms of the deal.

Also, under the amended agreement, MTR has agreed to increase the termination fee payable from MTR to Eldorado in certain circumstances from $5 million to $6 million, as well as the amount of expense reimbursement payable from $500,000 to $1 million.

The MTR and Eldorado merger still remains subject to various conditions, including government approvals and the adoption of the merger agreement by MTR stockholders.

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