Minn. Casino Owner Touts Merger With Nevada Company
HAGERSTOWN, Md. (AP) — Lakes Entertainment Inc., owner of the Rocky Gap Casino Resort in western Maryland, said Thursday its pending merger with a privately held Nevada gambling company will be a boon to shareholders and create a company uniquely positioned for growth in other states.
"We are very excited about this transaction and believe it will benefit Lakes' shareholders tremendously," CEO Lyle Berman said in a fourth-quarter earnings statement.
In an afternoon conference call with analysts and reporters, Berman called "totally meritless" a shareholder lawsuit alleging that Lakes, of Minnetonka, Minnesota, is selling itself too cheaply to Las Vegas-based Sartini Gaming Inc.
Under the deal announced in January, Lakes shareholders would get stock worth $9.57 a share in a new company, Golden Entertainment Inc., headed by Sartini CEO Blake Sartini. Lakes closed Thursday at $8.66.
Lakes has 13.4 million shares outstanding, making the deal worth about $128.2 million.
Berman said Golden Entertainment would be poised for growth in all three areas in which Sartini operates through its Golden Gaming unit in Nevada: casinos, taverns and slot machines placed in bars, taverns, and convenience and grocery stores.
Rocky Gap would get three sister casinos, all currently operated by Golden Gaming in Pahrump, Nevada, about 40 miles west of Las Vegas.
Lakes reported a net loss of $58,000 for the three months ending Dec. 28, an improvement over a nearly $900,000 loss in the same period of 2013.
The Rocky Gap casino, one of five in Maryland, met Lakes' expectations in the fourth quarter and the year, the company said.
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