Full House Resorts Issues Response to Letter From Z Capital Partners
LAS VEGAS, Oct. 23, 2018 (GLOBE NEWSWIRE) -- Full House Resorts, Inc. (Nasdaq: FLL) issued the following letter in response to the letter received yesterday from Z Capital Partners.
October 23, 2018
|Z Capital Partners, L.L.C.
||3755 Breakthrough Way #300
|1330 Ave. of the Americas
||Las Vegas, NV 89169
|New York, New York 10019
||Attn:||James J. Zenni, Jr.,|
|Attn:||James J. Zenni, Jr.,||Chairman, Board of Directors|
|President & CEO|
Dear Mr. Zenni:
The Board of Directors of Full House Resorts, Inc. (“Full House Resorts” or the “Company”) has reviewed your October 22, 2018 letter indicating the interest of Z Capital Partners, L.L.C. and its portfolio company Affinity Gaming (collectively, “you” or “Affinity Gaming”) in acquiring Full House Resorts at a price of $1.79 per share in stock or cash. Our Board has unanimously determined that the potential transaction referenced in your letter is not in the best interests of Full House Resorts and its stockholders.
Your letter indicates a price without specifying a transaction structure or providing evidence of financing. The price dramatically undervalues the Company’s business and does not remotely reflect the Company’s strategic value and future prospects. Our Board and management team see significant upside to the Company’s current and recent trading prices based on already-completed capital projects across our existing portfolio (with the recently launched and highly successful Rising Sun/Rabbit Hash ferry just one of many examples), as well as established or prospective organic growth opportunities in Colorado, Indiana and New Mexico, among other places.
The price indicated in your letter represents a material discount of 35% to the Company’s closing price on October 19, 2018, the last trading day prior to when you publicly announced your proposal, and a discount of 40% to the Company’s volume weighted average price during the preceding three months. This reflects a stark and fundamental disconnect from our Board’s understanding of the Company’s value, as well as that of third party investors and analysts.
We would also note that any combination of Affinity Gaming and our Company presents significant execution risks in light of the jurisdictional overlaps between Affinity Gaming and Full House Resorts.
When we met with Andrei Scrivens at Z Capital’s offices in Lake Forest, Illinois on September 21 – our only meeting – our purpose was to express potential interest in acquiring certain of Affinity Gaming’s assets. We remain interested in doing that.
Our Board and management team collectively own approximately 17% of Full House Resorts’ shares, and our highest priority is creating value for the Company’s stockholders. Based on our review, we are fully confident that our strategic plan will deliver value for our stockholders far superior to the value your letter indicates. Accordingly, our Board has no interest in pursuing what you propose.
On behalf of the Board of Directors,
|Bradley M. Tirpak||Daniel R. Lee|
|Chairman of the Board||President, Chief Executive Officer and Director|
Wachtell, Lipton, Rosen & Katz is serving as legal advisor to Full House Resorts.
About Full House Resorts, Inc.
Full House Resorts owns, leases, develops and operates gaming facilities throughout the country. The Company’s properties include Silver Slipper Casino and Hotel in Hancock County, Mississippi; Bronco Billy's Casino and Hotel in Cripple Creek, Colorado; Rising Star Casino Resort in Rising Sun, Indiana; and Stockman’s Casino in Fallon, Nevada. The Company also operates the Grand Lodge Casino at the Hyatt Regency Lake Tahoe Resort, Spa and Casino in Incline Village, Nevada under a lease agreement with the Hyatt organization. Further information about Full House Resorts can be viewed on its website at www.fullhouseresorts.com.
This press release may contain statements by Full House Resorts, Inc. that are "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are neither historical facts nor assurances of future performance. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Information concerning potential factors that could affect our financial condition and results of operations is included in the reports we file with the SEC, including, but not limited to, our Form 10-K for the most recently ended fiscal year and our other periodic reports filed with the SEC. We are under no obligation to (and expressly disclaim any such obligation to) update or revise our forward-looking statements as a result of new information, future events or otherwise, except as otherwise required by law. Actual results may differ materially from those indicated in the forward-looking statements.
Lewis Fanger, Chief Financial Officer
Full House Resorts, Inc.
Released October 23, 2018