Empire Resorts, the owner of Resorts World Catskills and Monticello Raceway in New York state, has reached a definitive agreement under which affiliates of Kien Huat Realty III Limited and Genting Malaysia Berhad will acquire all of the outstanding equity of the company not currently owned by Kien Huat or its affiliates.
Kien Huat Realty and Genting Malaysia will pay $9.74 in cash per share of common stock, with each share of the company’s Series B preferred stock receiving the same consideration on an as-converted to common stock basis. Kien Huat is currently the holder of approximately 86% of Empire Resorts’ outstanding shares of common stock, including common stock issuable upon conversion of the company’s Series F convertible preferred stock.
Empire Resorts and Kien Huat also amended Kien Huat’s existing preferred stock commitment letter with the company, which, subject to the terms thereof, enhances Empire Resorts’ access to capital through February 2020. The amendment increases Kien Huat’s remaining commitments from $52m to $77m. This credit support will enable the company to continue satisfying its debt obligations, while facilitating its operating strategy.
“We are pleased to reach this agreement and provide immediate certain cash value to our stockholders,” said Keith Horn, independent director of Empire Resorts. “Kien Huat has been a true partner for Empire Resorts, and we look forward to welcoming Genting Malaysia into our ongoing relationship.
“With Kien Huatand 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.”
Ryan Eller, President and Chief Executive Officer of Empire Resorts, said: “With the resources and support of Kien Huatand 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.
“This transaction is a win-win for all our stakeholders, including our stockholders, customers, employees, creditors and the communities in which we operate. Importantly, we expect our employees will benefit from new opportunities for career development as part of a larger organization. I look forward to working closely with Kien Huat and Genting Malaysia to seamlessly complete the transaction.”
The transaction, which is expected to close in the fourth quarter of 2019, requires “majority of the minority” stockholder approval and provides an opportunity for Empire Resorts’ stockholders to exercise their appraisal rights in connection with the proposed transaction. The transaction is also subject to the satisfaction of customary closing conditions and regulatory approvals, including obtaining specified gaming authority approvals and performance of the parties’ contractual obligations through closing.