This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The Deal: Third Bidder Approached MTR

NEW YORK (The Deal) -- Jacobs Entertainment continues to pursue a spoiler bid for MTR Gaming Group  (MNTG) as an alternative to that company's pending $145 million merger with private Eldorado Resorts, but yet another party has entered the bidding. 

The proxy for the Eldorado deal was filed Monday with the Securities and Exchange Commission under the legal entity Eclair Holdings Co. The Eldorado deal of Sept. 9 values the target at $5.15 in a mix of cash or new equity in the combined MTR and Eldorado. Jacobs Entertainment, which previously had offered itself as a target for MTR, made a spoiler bid based on a multiple of MTR's trailing EBITDA that would place a value of $5.69 on the gaming company. 

MTR has casino operations in West Virginia, Ohio and Pennsylvania. Eldorado operates in Nevada and Louisiana, Jacobs has casinos in Colorado, Nevada, Virginia and Louisiana. Jacobs, which is privately held, owns 18% of MTR through its founder Jeffrey Jacobs. 

The proxy for the merger with Eldorado relates that another company, called company Z in the document, approached MTR in late October with an unsolicited bid between $5.25 and $5.50 per share for MTR. That offer is conditioned on due diligence but not any financing condition. Company Z is identified as a strategic buyer. 

MTR, on its Tuesday conference call, declined to comment on the process as its board mulls the offers. 

Both Jacobs and company Z have entered into confidentiality agreements with MTR. 

Jacobs previously claimed its proposal gives Eldorado a 55% share of the merged gambling operations and offers better geographic diversity, tax benefits, and swifter regulatory approvals than the Eldorado combination. 

Jacobs said in an SEC filing in late October that among other things, the valuation of the Eldorado combination might be artificially skewed by the Reno, Nevada's national bowling championship, which could inflate Eldorado's EBITDA by $5 million. 

Jacobs, in its 13D filing also states that to simplify its bid in response to MTR, it determined to not distribute $18.7 million of real estate out of its gaming operations prior to a proposed deal close to remove the need of lender consents on related mortgages. Jacobs also notes that the pending reorganization of Penn National Gaming Inc. into a REIT could increase the demand for gaming-related real estate, which might increase the value of that real estate holding. Jacobs said that it would accept $15 million in stock in the combined company regarding the real estate to avoid valuation discussions. 

MTR reported third-quarter revenues of $129 million, down 11.5% compared to the same period last year. Adjusted EBITDA for the third quarter was $22.5 million, off 28%. 

MTR shares traded Wednesday for $5.22, down 4 cents, or 0.7%.

Written by Scott Stuart 

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,880.36 -31.75 -0.19%
S&P 500 1,970.87 +0.92 0.05%
NASDAQ 4,465.1050 +22.4070 0.50%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs