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Jacobs seeks to outbid Eldorado Resorts for MTR

John Seelmeyer
jseelmeyer@nnbw.biz

Jacobs Entertainment says it’s prettier and brings a bigger dowry than Reno’s Eldorado Resorts LLC to the battle to win the heart of West Virginia gaming operator MTR Gaming.

Colorado-based Jacobs, whose holdings include the Gold Dust West properties in Reno, Carson City and Elko, last week sought to outbid Eldorado Resorts’ plan to merge with MTR.

Jacobs said its offer is worth $5.69 a share to the holders of MTR’s common stock. A merger to which Eldorado and MTR agreed in early September is worth $5.15 a share.



Just as important, Jacobs contends that MTR’s shareholders would be aligning themselves with a more attractive merger partner if they accept the Colorado company’s proposal.

Jacobs’ holdings include five casinos, a horse track in Virginia, and 23 video-poker truck plazas in Louisiana.



Eldorado Resorts owns the Eldorado branded hotel-casinos in downtown Reno and Shreveport, La. It also owns a half interest in Reno’s Silver Legacy Resort Casino.

In a presentation supporting its bid for MTR, Jacobs described the Eldorado’s markets as highly competitive with downside risk and argued that MTR’s shareholders should instead align themselves with Jacobs.

Last week’s offer marks the second run that Jacobs has made at MTR.

In May, Jeffrey Jacobs, the chairman and chief executive of the company, offered to sell Jacobs Entertainment to MTR for $144.4 million in MTR stock. The deal would have made Jacobs the majority shareholder of MTR.

But that offer was pulled from the table in August. A couple of weeks later, MTR and Eldorado Resorts announced their merger plans.

Jacobs said in a filing with the Securities and Exchange Commission last week that he currently owns an 18.14 percent stake in MTR.

If the merger with Eldorado Resorts goes through, the chief executive officer of the combined company will be Eldorado executive Gary Carano. He didn’t have any immediate comment on Jacobs’ proposal last week.

MTR operates casinos and racetracks in West Virginia, western Pennsylvania and Ohio. It earned $2.4 million in the second quarter of this year, which compared with a loss of $2.35 million in the comparable quarter a year earlier. Its revenues — 90 percent from gaming operations — totaled $132.3 million in the second quarter.

It carries nearly $558 million in long-term debt.