Full House Resorts Inc. was acquired for $21 million
The Morongo Band of Mission Indians on Thursday announced it had acquired for $21 million a Las Vegas-based casino management and development company.
The company, Full House Resorts Inc., primarily manages Midway Slots and Simulcast at the Delaware State Fairgrounds in Harrington, Del., where it maintains 1,400 slots, a 450-seat buffet, a dining room and a lounge.
“Morongo has sought ways to continue to diversify its economic ventures and this investment will allow us to bring our gaming management expertise and experience to bear in new markets,” said Maurice Lyons, tribal council chairman.
The tribe said it would fund the purchase from cash reserves and existing credit facilities. The Morongo Band in May broke ground on its new $250-million, 23-story casino resort hotel which will make it one of the largest gaming destinations in California.
Full House Resorts became a public company in 1992, and moved to Las Vegas in 1998 — the same year it sold a casino in Deadwood Gulch, S.D.
“This is an excellent opportunity for our shareholders,” said William McComas, chairman and chief executive of Full House. “They will receive a significant premium to the market price for their shares.”
McComas will leave the company on completion of the sale, according to a company spokesman.
Each shareholder is to receive $1.30 per share for each share of common stock while holders of its preferred stock will get $6.15 per share.
For much of this year the stock has traded for under $1 per share but jumped to $1.15 on news of the proposed sale.
The $21 million transaction includes the assumption of $2.4 million in debt, according to a press release from Full House.
The deal, which is slated to close in the fourth quarter of this year, is subject to approval of the Morongo tribe, the shareholders of Full Resorts, and regulators.
Full Resorts has worked with the Torres Martinez Desert Cahuilla of Thermal in its effort to develop a casino. The tribe is still awaiting a gaming compact with the state.
Additionally, Full Resorts has an agreement with the Huron Potawatomi tribe to build a casino near Battle Creek, Mich., which has been approved but which is facing a federal court suit brought by a group of citizens.
A management contract with a tribe in Oregon to build a casino was ended a year ago.
Full House, according to its spokesman, had faced economic challenges which led it to work with an investment bank to seek a partner or a sale.
For its part, the Morongo tribe also owns and operates a $26 million water bottling plant, a 16-island gasoline station, as well as an A&W; drive-in restaurant and a Cocos, all in the Cabazon area.
The tribe also owns the landmark Hadley Fruit Orchards, which includes three retail outlets and mail order and Internet operations.