Howard Stutz, Las Vegas Review-Journal
Casino operator Full House Resorts said Monday the Las Vegas-based company has been “evaluating strategic alternatives for several months” and called a proxy fight by a group of shareholders “inappropriate and disruptive.”
The company said in a statement it was exploring options, such as “potential merger or sale of the company.”
The statement followed a proxy solicitation filed last week with the U.S. Securities and Exchange Commission by a group of Full House shareholders. The group is led by former Pinnacle Entertainment CEO Dan Lee and is seeking a special stockholders meeting to remake the company’s board of directors.
Full House owns three casinos: one in Indiana, one in Mississippi and the Stockman’s Casino in Fallon. The company also manages the Grand Lodge Casino at Hyatt Regency Lake Tahoe under a lease agreement. In September, the company’s management contract for an Indian casino in New Mexico ended.
Full House said it would “inform its stockholders of the result of its review of strategic alternatives at the appropriate time” and asked its shareholders to not take any actions on the proxy filing.
“The company also notes that many of the statements made by the dissident group are inaccurate or misleading,” according to the statement.
The stockholder group owns 6.2 percent of the company’s outstanding shares and wants to elect five new members to the company’s board. The company has a current market capitalization of $24.9 million.
Lee said Full House “has failed stockholders” and went on “a reckless buying binge, overpaying for three shrinking casinos and pursuing two hotel additions that have marginal returns.”
Lee is a gaming industry veteran who also served as chief financial officer of Steve Wynn’s Mirage Resorts.
The five shareholders include former Boyd Gaming Corp. Chief Financial Officer Ellis Landau, who is president of the holding company that owns the Aliante Casino in North Las Vegas.
In a letter to Full House shareholders, the group said the company’s shares, which are traded on Nasdaq, fell almost 59 percent between September 2013 and September 2014.
The group criticized a failed attempt by Full House to purchase a Tunica, Miss., casino this year in which the company lost more than 97 percent of $1.75 million escrow account and spent $300,000 in professional fees associated with the transaction.
Full House posted a series of talking points to the company’s website, saying the casino operator has been proactive in addressing economic pressure by reducing costs at both its property and the corporate level. Full House said it withdrew its purchase of the Tunica casino because of declines in the Mississippi gaming market.
“The company will pursue the strategy that is in the best interest of all stockholders, and encourages its stockholders not to support actions that enable the dissident group to take control of the company without providing a fully formed strategic plan to create value for stockholders of the company,” Full House said in a statement.
Lee’s group needs SEC approval to approach Full House stockholders. The proxy fight will need 40 percent approval from shareholders to schedule a vote.
Shares of Full House, traded on the Nasdaq, closed at $1.32 Monday, up 2 cents, or 1.54 percent.
Replies:
No replies were posted for this topic.
