Hollywood Park Rolls the Dice
Hollywood Park Inc. said Tuesday that it has offered to buy Players International Inc.--a small operator of riverboat casinos that is partly owned by Merv Griffin--for $210 million in cash.
But the offer from the Inglewood-based horse racing track and casino operator met with a lukewarm response from Players, which said only that various other parties had indicated an interest in pursuing a deal with the company.
“We are disappointed that Players International did not respond more affirmatively to our proposal,” Hollywood Park Chairman and Chief Executive R.D. Hubbard said in a statement. “We intend to evaluate how best to provide Players’ stockholders with an opportunity to obtain the benefits of this proposal.”
Under its proposal, Hollywood Park would buy all of the common stock of Atlantic City, N.J.-based Players for $6 a share in cash. In addition, Hollywood Park would assume about $140 million in debt.
On Tuesday, Players International shares rose 63 cents to close at $5.63 in Nasdaq trading. Hollywood Park stock climbed 31 cents to finish at $10.44 on the New York Stock Exchange.
Players International said it received Hollywood Park’s offer on Nov. 2 and responded by offering to provide Hollywood Park with internal information if it signed a confidentiality agreement. Hollywood Park did not respond to Players International’s request and instead revealed its offer to the public.
“The company will continue to manage its business and will consider any reasonable business combination,” according to a statement issued by Players International.
Officials of both companies were unavailable for further comment.
Industry analysts said Players has been on the sales block unofficially for more than a year. Harrah’s Entertainment Inc., Los Angeles-based Colony Capital, Hilton Hotels Corp. and Hollywood Park have been among the most likely candidates to buy Players International, which operates riverboat casinos in Illinois and Louisiana and other small gaming properties.
“They don’t have any growth projects,” said gaming industry analyst Joseph V. Coccimiglio at Prudential Securities. “They would really fit better in a bigger company with more diversity.”
An acquisition of Players International would fit into Hollywood Park’s ongoing efforts to expand beyond its traditional racetrack business, said industry observers. Earlier this year, Hollywood Park agreed to buy Casino Magic Corp.--which operates a small chain of riverboat and dockside casinos--for $81 million in cash and the assumption of $263 million in debt.
Hollywood Park was reportedly interested in buying cross-town rival Santa Anita Park but is no longer considered a front-runner to acquire that racetrack, according to Coccimiglio.
Players International, which was once headquartered in Calabasas, was founded by the Fishman brothers, who operated it as a discount club for members for several years before teaming up with entertainer Merv Griffin and entering the riverboat gaming business in 1993.