Empire Resorts to be acquired by Kien Huat, Genting Malaysia for $9.74 per share
Empire Resorts announced a definitive agreement under which affiliates of Kien Huat Realty and Genting Malaysia Berhad will acquire all of the outstanding equity of the company not currently owned by Kien Huat or its affiliates for $9.74 in cash per share of common stock and with each share of the company's Series B preferred stock receiving the same consideration on an as-converted to common stock basis. Kien Huat is currently the holder of approximately 86% of Empire Resorts' outstanding shares of common stock, including common stock issuable upon conversion of the company's Series F convertible preferred stock. The purchase price represents a premium of approximately 15% over the closing share price of Empire Resorts' common stock on August 16, the last trading day prior to this announcement. The board of Empire Resorts has approved the transaction on the unanimous recommendation of the previously formed special committee of independent directors. Empire Resorts and Kien Huat also amended Kien Huat's existing preferred stock commitment letter with the company, which, subject to the terms thereof, enhances Empire Resorts' access to capital through February 2020. The amendment increases Kien Huat's remaining commitments from $52M to $77M. This credit support will enable the company to continue satisfying its debt obligations, while facilitating its operating strategy. Under the terms of the agreement, Empire Resorts' special committee, with the assistance of its financial advisor, will conduct a 10-business day "go-shop" process following the date of the announcement of the definitive agreement, during which it will actively initiate, solicit, encourage and evaluate alternative acquisition proposals, and potentially enter into negotiations with any parties that may offer alternative acquisition proposals. This process will facilitate efforts to maximize value for stockholders. Empire Resorts will have the right to terminate the definitive agreement to accept a superior proposal, if one is received, subject to the terms and conditions of the definitive agreement. There can be no assurance that this "go-shop" process will result in a superior proposal or that any other transaction will be approved or completed. Empire Resorts does not intend to disclose developments with respect to the solicitation process unless and until its special committee makes a determination requiring further disclosure. The transaction is expected to close in Q4. The transaction requires "majority of the minority" stockholder approval and provides an opportunity for Empire Resorts' stockholders to exercise their appraisal rights in connection with the proposed transaction. The transaction is also subject to the satisfaction of customary closing conditions and regulatory approvals, including obtaining specified gaming authority approvals and performance of the parties' contractual obligations through closing. Kien Huat has also entered into a voting agreement under which it has committed its voting shares in support of the transaction. Upon completion of the transaction, Empire Resorts will become a privately-held company and its common stock will no longer be listed on any public market.