BALLY GAMING UNANIMOUSLY REJECTS CONDITIONAL PARTIAL TENDER OFFER BY ALLIANCE GAMING; Cites Illusory Financing and Dubious Value of Alliance Stock; Restates Support of WMS Merger; Sets Annual Meeting for Oct. 11, 1995.LAS VEGAS--(BUSINESS WIRE)--August 8, 1995--Bally Gaming International, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :BGII BGII Baldur's Gate II: Shadows of Amn (computer game) ) today announced that its board of directors has determined that the partial tender offer by Alliance Gaming Alliance Gaming NYSE: AGI is a Las Vegas, Nevada based manufacturer of slot machines and casino management software. History On June 18, 1996 merged with Bally Gaming International. Corporation (NASDAQ:ALLY) for 4.4 million Bally bally Adjective, adv Brit old-fashioned, slang extreme or extremely: a bally nuisance, he's too bally charming for his own good Adj. 1. Gaming shares is inadequate, highly conditional and not in the best interest of Bally Gaming shareholders. In unanimously rejecting the Alliance offer, the board cited, among other things: -- The opinion of Ladenburg, Thalmann & Co. Inc., an independent investment bank retained as BGII's financial advisor, that the two-step Alliance transaction is not as favorable, from a financial standpoint, as the merger with WMS WMS Warehouse Management System WMS Web Map Service (open geospatial consortium specification) WMS West Middle School (Rochester Hills, MI) WMS Workforce Management Software WMS Wechsler Memory Scale Industries Inc. and that Ladenburg could not render an opinion that the two-step Alliance transaction is fair. -- A combination with perennially unprofitable Alliance would result in an unstable, undercapitalized Undercapitalized A business has insufficient capital to carry out its normal functions. undercapitalized Of, relating to, or being a firm that has insufficient long-term equity to support its assets. , highly leveraged company which could raise licensing concerns among gaming industry regulators. -- The combined entity would have a negative tangible net worth Tangible Net Worth Total assets less intangible assets and total liabilities. Notes: In terms of a consumer, tangible net worth is the sum of all your tangible assets (cash, home, cars, etc). of approximately $10 million and $250 million of debt. -- The illusory nature of Alliance's financing for the cash portion of the transaction, which consists solely of a $150 million "senior secured bridge facility," requires permanent financing Permanent financing Long-term financing using either debt or equity. permanent financing The long-term financing that supports a long-term asset. and $20 million of additional equity, both of which Alliance admits it does not have. -- The dubious value of the back-end stock portion of the Alliance proposal, especially given the fact that Alliance has not reported an annual profit in the last five years, already has debt of $100 million, and would incur $150 million in additional debt to acquire Bally Gaming. -- Alliance's cash tender offer would be fully taxable to Bally Gaming shareholders. -- Alliance has not demonstrated that any synergies would result from a combination of BGII and Alliance. A combined entity would not have the resources to operate its business effectively or support growth. The board of Bally Gaming also restated its belief that the previously announced merger with WMS Industries, Inc. (NYSE NYSE See: New York Stock Exchange :WMS) is in the best interest of Bally Gaming shareholders. Under the definitive agreement signed on June 21, 1995, each share of BGII Common Stock will be converted into .55 of a share of WMS Common Stock, resulting in a current non-taxable value to BGII shareholders of $12.17 per share, based on the yesterday's closing price of WMS shares. Under the WMS merger, shareholders could also receive incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. value from the sale of Bally Gaming's German operations, Bally Wulff. Bally Gaming expects shareholders to receive a cash payment of approximately $.45 per share, based on the anticipated sale of Bally Wulff for at least $60 million. Bally Gaming said an investor group has indicated interest in purchasing Bally Wulff for $60 million in cash, net to Bally Gaming. Bally Gaming is negotiating with this investor group but it is also seeking additional buyers. The Bally Gaming Board also announced that it has set Wednesday, Oct. 11, 1995 as the date for its annual meeting and election of directors, as well as for a shareholder vote on the WMS merger agreement. On July 28, 1995, Alliance commenced an unsolicited, partial conditional tender offer for 4.4 million shares of the 10.75 million outstanding Common Shares of Bally Gaming at $12.50 a share. Bally Gaming International Inc., through its subsidiaries, is a world leader in the manufacture of gaming and computer-tracking devices for casinos. The company designs, manufactures and distributes its gaming and computer systems through its Bally Gaming Inc. subsidiaries in Las Vegas Las Vegas (läs vā`gəs), city (1990 pop. 258,295), seat of Clark co., S Nev.; inc. 1911. It is the largest city in Nevada and the center of one of the fastest-growing urban areas in the United States. and Reno, Nev. and its Bally Wulff subsidiaries in Berlin and Hannover, Germany. CONTACT: Bally Gaming International Inc. Neil E. Jenkins 312/992-1144 or Sard Verbinnen & Co. George Sard/Anna Cordasco 212/687-8080 |
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