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Bailey McCann, Opalesque New York: Las Vegas-based Affinity Gaming is under new pressure to sell according to a letter sent by Z Capital, a Chicago-based private equity firm. Z Capital is the largest shareholder of the company with an approximately 40% stake. Z made an offer to buy the remaining shares in April, but that offer was rejected by the company, prompting the letter.
Affinity owns casinos in Las Vegas, and emerged from bankruptcy in 2012. Shares of the company don't trade often, and are usually priced between $8-$10. Z offered $9.75 per share in cash. Other investors include hedge funds Silver Point Capital and Highland Capital Management, according to the Wall Street Journal.
In April, the company formed a committee of independent directors to review the Z Capital proposal and other options. Deutsche Bank is acting as the financial advisor for the committee.
Z Capital CEO James Zenni sits on the board at Affinity after taking the seat last year.
"We are disappointed by the Special Committee’s response with respect to our proposal. Despite the fact that Affinity Gaming exited bankruptcy four and half years ago and has sat on $100 million of costly excess cash for three years, it has seen no meaningful board leadership or value creation for shareholders," Z Capital wrote in the letter. The firm is pushing for a sale o...................... To view our full article Click here
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