Monticello, N.Y.-based casino operator Empire Resorts Inc. on Aug. 19 agreed to be taken private by Genting Malaysia Bhd. and an investment vehicle owned by its Chairman and CEO Kok Thay Lim.
Genting Malaysia, which operates resorts and casinos in Malaysia, the U.S., the U.K. and Bahamas, and Kien Huat Realty III Ltd. said they agreed to buy all of the approximately 14% of Empire Resorts shares that are not already held by Kien Huat.
The affiliates of Genting Malaysia will buy the remaining shares for $9.74 apiece from minority shareholders including Atria Investments LLC. The offer price represents a 15% premium to the closing price of $8.45 on Aug. 16, the last trading day before the announcement.
Shares of Nasdaq-listed Empire Resorts jumped more than 16% to $9.83 during early trading hours on Aug. 19.
"With the resources and support of Kien Huat and Genting Malaysia, Empire Resorts will be better positioned financially and operationally, which will help us advance our mission of delivering a winning combination of luxury facilities, quality entertainment and exceptional customer service," said Empire Resorts President and CEO Ryan Eller.
Empire Resorts' board approved the transaction on a unanimous recommendation of the previously formed special committee of independent directors.
"Kien Huat has been a true partner for Empire Resorts, and we look forward to welcoming Genting Malaysia into our ongoing relationship. With Kien Huat and Genting Malaysia, we will be part of an extensive and attractive organization with enhanced scale and global reach," said Keith Horn, independent director of Empire Resorts and chair of the special committee.
In addition, Empire Resorts and Kien Huat also amended the latter's existing preferred stock commitment letter that will boost Empire Resorts' access to capital until February 2020 and increases Kien Huat's remaining commitments toward the U.S. company to $77 million from $52 million. Horn said that the increased support will help the company meet its debt obligations.
The acquisition is expected to close in the fourth quarter, subject to stockholder and regulatory approvals.
Earlier this month, Genting Malaysia announced that it entered a binding term sheet to acquire 46% of Empire Resorts held by Kien Huat at a similar purchase price for a total purchase price of about $128.6 million. The stake carries voting rights of about 35%.
Moelis & Co. LLC is acting as financial adviser to Empire Resorts' special committee. Paul Weiss Rifkind Wharton & Garrison LLP is acting as Empire Resorts' legal adviser. Cleary Gottlieb Steen & Hamilton LLP is acting as legal adviser to Genting Malaysia.
