Z Capital Partners and its affiliate, Affinity Gaming, have announced a proposal to acquire casino operator Full House Resorts.
The proposed transaction would be structured as a cash or stock transaction with an enterprise value of the company of $132.5m, which equates to $1.79 per share on a fully diluted basis.
“Our proposal represents a unique and compelling opportunity to maximise value for stockholders and stakeholders in both companies,” said James Zenni, chairman of Affinity’s board of directors and CEO of Z Capital Partners.
“Combining Full House’s custom-designed, regional gaming properties with Affinity’s complementary portfolio will create a best-in-class platform for value creation in this consolidating market.
“With an experienced and dedicated management team, Affinity would bring significant operational capabilities and expertise that we believe would further propel the combined company’s growth and unlock unrealised potential for Full House stockholders.”
Zenni continued: “We look forward to a constructive dialogue with the Full House Resorts board of directors as they carry out their fiduciary duties on behalf of the company's stockholders.”
Upon closing, the combined company would remain headquartered in Las Vegas, with a management team led by recently appointed Affinity CEO Tony Rodio, a proven executive with more than three decades of experience in the gaming industry.
Full House Resorts acknowledged the expression of interest but said in a statement: “This is the first time that the company has been made aware of Z Capital’s interest. Its board of directors intends to consider the expression of interest in due course.
“The company noted, however, that the expression of interest reflects a price that is significantly below recent and past trading of its stock and well below most expectations for the value of the company.
“The company noted, for example, that a recent research report by Roth Capital Partners, taking into consideration the company’s recent developments and significant development opportunities, recommends the stock with a target price of $4.50 per share.”
