Full House Resorts says Affinity Gaming offer may be too low

A small publicly traded Las Vegas-based casino company has acknowledged a $132.5 million takeover offer from privately held Affinity Gaming of Las Vegas, but indicated the bid might not be high enough.

In a Securities and Exchange Commission filing Monday, Full House Resorts Inc. reported that Affinity, affiliated with Z Capital Partners LLC, which has offices in New York and Chicago, proposed acquiring the regional casino operator in a structured cash or stock offer of $1.79 a share.

Full House Resorts responded immediately with a statement indicating its board would consider the offer, but that “the expression of interest reflects a price that is significantly below recent and past trading of its stock and well below most expectations for the value of the company.”

Full House said a recent research report by Roth Capital Partners, taking into consideration the company’s recent developments and significant development opportunities, recommends the stock with a target price of $4.50 a share.

Affinity, which has 11 casinos, including five in Nevada, three in Colorado, two in Missouri and one in Iowa, would keep the company headquartered in Las Vegas. The Nevada properties include Buffalo Bill’s, Primm Valley and Whiskey Pete’s in Primm, the Rail City Casino in Sparks and Silver Sevens in Las Vegas.

Full House’s Nevada properties include the Grand Lodge Casino at the Hyatt Regency Lake Tahoe and Stockman’s Casino in Fallon. It also operates Rising Star Casino Resort in Indiana, the Silver Slipper Casino Hotel in Mississippi, and Bronco Billy’s in Colorado.

“Our proposal represents a unique and compelling opportunity to maximize value for stockholders and stakeholders in both companies,” James Zenni, chairman of Affinity’s board of directors and CEO of Z Capital Partners, said in a statement announcing the proposal.

“Combining Full House’s custom-designed, regional gaming properties with Affinity’s complementary portfolio will create a best-in-class platform for value creation in this consolidating market,” Zenni said. “With an experienced and dedicated management team, Affinity would bring significant operational capabilities and expertise that we believe would further propel the combined company’s growth and unlock unrealized potential for Full House stockholders.”

Full House shares were down 9 cents, 3.3 percent, to $2.65 a share on volume 7½ times the daily average.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.