Shares down almost 60 percent
Casino operator Full House Resorts is looking for a buyer. The Las Vegas-based company owns the Rising Star Riverboat Casino in Rising Sun, Indiana; the Silver Slipper Casino in Hancock County, Mississippi; and Stockman’s Casino in Fallon, Nevada. It also operates a Hyatt in Incline Village, Nevada under a lease agreement, reported the Las Vegas Sun.
Shares of Full House stock have plummeted almost 60 percent since the beginning of the year; the decline sparked outrage from shareholders, a group of whom recently demanded a reconfiguration of the board.
The shareholder group, led by former Pinnacle Entertainment CEO Dan Lee, is proposing to double the size of the board to 10 and enforce a change in the company’s direction. It has asked the Securities and Exchange Commission for permission to approach other shareholders. The proxy fight will need 40 percent approval from shareholders to schedule a vote.
The group has reserved special criticism for the company’s management. It said executives are overcompensated despite the 59 percent drop in share values. In reply, Full House said it has been “evaluating strategic alternatives for several months” and called the fight “inappropriate and disruptive.” In its most recent statement, company officials said they “welcome the dissident stockholder group to participate in the sale process.”
The statement went on to say a special shareholders meeting requested by the group would give it “effective control of the company’s board” and wasn’t in the best interests for shareholders.”
Full House is working with Macquarie Capital as its financial advisor and Latham & Watkins LLP as its legal advisor as it prepares to sell.
Meanwhile, according to the Casino City Times, a trust set up by the company’s late CEO agrees with the shareholder group. Crystal Christensen and Vikki Paulson, co-trustees of the Allen E. Paulson Living Trust, have said they want more “transparency” from the board.
“While we are reserving judgment on the merits of the various proposals put forward by this group, we do believe it is important that the stockholders and the company have an open dialogue with respect to its management,” the co-trustees wrote. The trust controls 9.4 percent of Full House; Lee’s group holds 6.2 percent.
