Empire Resorts Inc., which owns and operates the Resorts World Catskills casino resort and Monticello Raceway in Sullivan County, today announced that is being acquired by affiliates of Kien Huat Realty III Limited and Genting Malaysia Berhad.
Kien Huat Realty III Ltd. has been the largest stockholder in Empire Resorts. Genting Malaysia, owns and operates major resort properties. It has more than 40 casinos in the United Kingdom, Resorts World Bimini in the Bahamas and Resorts World Casino New York City.
A preliminary nonbinding proposal to acquire all outstanding equity in Empire Resorts Inc. dated Aug. 5, was submitted to a special committee of Empire Resorts’ board of directors at its Monticello address. The letter had been filed with the Securities and Exchange Commission and the Business Journal obtained a copy. Today’s announcement from Empire Resorts said they now have a definitive agreement.
Under the agreement, Kien Huat and Genting Malaysia will acquire all of the remaining equity for $9.74 in cash, approximately a 15% premium above the common stock closing price on Aug. 16.
Ryan Eller, president and CEO of Empire Resorts, said, “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.”
The Aug. 5 letter contemplated that “Genting Malaysia would assist in operating the company and its subsidiaries pursuant to an arm’s length operations agreement.”
Keith Horn, an independent director of Empire Resorts, said, “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. Importantly, Kien Huat has agreed to provide incremental credit support to Empire Resorts, which will enable the Company to meet its debt obligations as we continue to execute on our business strategy.”
The agreement provides for Empire Resorts to have special committee, with the assistance of its financial adviser, conduct a 10-business day process following today’s announcement 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 our 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,” Empire’s announcement said.
Barring a different deal, the transaction is expected to close in the fourth quarter of 2019.