Bally Gaming board endorses increased offer from WMS; rejects revised conditional partial tender offer by Alliance Gaming.LAS VEGAS--(BUSINESS WIRE)--Sept. 27 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 an increased offer from 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. (NYSE NYSE See: New York Stock Exchange : WMS) is financially superior and offers greater economic value for BGII shareholders than the revised conditional 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. Corp. (NASDAQ:ALLY). In reaching its conclusion, the board noted that WMS's increase of the exchange ratio from .55 to .625 shares of WMS common stock for each share of Bally Gaming stock will result in shareholders receiving consideration of $13.36, based on yesterday's closing price of WMS shares. Alliance's latest revised conditional partial tender offer provides for a $13.00 payment for only 5.4 million BGII shares and Alliance common stock for the remaining shares. The board noted that Alliance had to agree to pay more than 30% in interest and fees to obtain a large portion of its financing and Bally Gaming will be saddled with these costs after a merger with Alliance. The board also cited the obviously dubious value of the back-end stock portion of the Alliance proposal, given Alliance's high leverage, continuing losses, and illiquid Illiquid An asset or security that cannot be converted into cash very quickly (or near prevailing market prices). Notes: A house is a good example of an illiquid asset. See also: Cash, Liquidity Illiquid In the context of finance. stock. The "collar" proposed by Alliance would not protect BGII shareholders from receiving less than $13.00 per share if the price of Alliance stock falls below $4.25. Yesterday, shares of Alliance's stock closed at $4.75. In unanimously rejecting the Alliance offer, the Board also cited the opinion of Ladenburg. Thalmann & Co. Inc., the board's independent financial advisor, that the revised WMS offer, from a financial point of view, is more favorable than Alliance's latest revised conditional partial tender offer. Ladenburg noted in its presentation to the board that the unusually expensive and risky debt financing Debt Financing When a firm raises money for working capital or capital expenditures by selling bonds, bills, or notes to individual and/or institutional investors. In return for lending the money, the individuals or institutions become creditors and receive a promise to repay Alliance proposes to use to fund its tender offer for Bally Gaming shares, on top of its already high leverage, could bankrupt a combined Alliance/Bally Gaming entity. Bally Gaming also said Alliance has just made numerous corrective disclosures in its most recent 14D-1 filing with the SEC on Sept. 22, 1995, admitting -- in Alliance's own words -- among other things: o That "Alliance is highly-leveraged, and will be more leveraged following its tender offer borrowings. The total amount of long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. of Alliance and the company following consummation of the Offer will be approximately $242,000,000." o That "there is no assurance as to the ability of Alliance to obtain the $150,000,000 in permanent financing Permanent financing Long-term financing using either debt or equity. permanent financing The long-term financing that supports a long-term asset. or to refinance the Notes through borrowing by the Company on acceptable terms" and that "inability to do so could result in Alliance's insolvency." o That "Alliance has not reported positive GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). earnings since 1990" and that "there is no assurance that reported net losses will not continue." o That Texas Rangers Texas Rangers, mounted fighting force organized (1835) during the Texas Revolution. During the republic they became established as the guardians of the Texas frontier, particularly against Native Americans. baseball team co-owner Richard Rainwater Richard E. Rainwater (born 1943) is an investor and billionaire fund manager. With an estimated current net worth of around $3.5 billion, he is ranked by Forbes as the 91st richest person in the United States. was actively involved in company activities this year and that "there is a significant probability Mr. Rainwater will dispose of his portion of such shares and warrants" and that "such a disposition could have an adverse impact on the value of Alliance common stock." o That "any delay in completing the proposed merger could adversely affect Alliance's business plans and ability to service its debt." o That Alliance's intention of ignoring a non-compete agreement that Bally Gaming has with Bally Entertainment, its former parent and one of its largest customers, "could result in the termination of the license to use the Bally name. Bally Gaming said Alliance has still not fully disclosed the effect that consummating its offer would have on the financial viability of a combined Bally Gaming/Alliance entity. For example, completing the Alliance tender offer could result in BGII being required to prepay $40 million to a lender that has the right to demand payment in the event of a change of control. Alliance has not disclosed how it would be able to make this $40 million principal payment. 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 and Reno, Nevada 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 |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion