A Special Committee of the board of directors of Empire Resorts – which owns and operates embattled New York IR Resorts World Catskills – has recommended the approval of a proposed merger involving Genting Malaysia and its Chairman Lim Kok Thay.
According to an announcement by Genting Malaysia on Tuesday, the Special Committee, comprising independent, disinterested directors, has determined the merger is in the best interests of Empire shareholders and that a merger agreement should be submitted for approval at a shareholders’ meeting.
As previously reported by Inside Asian Gaming, Genting Malaysia has entered into a binding term sheet with Kien Huat Realty III Ltd, the family trust of Lim Kok Thay, for the company’s wholly-owned subsidiary Genting (USA) Ltd to acquire 13.2 million shares in Empire Resorts, equivalent to a 35% stake. In turn, Kien Huat, which currently holds an 86% stake in Empire, will acquire all remaining Empire shares and form a new joint venture entity to be 51% owned by Kien Huat and 49% by Genting (USA) Ltd.
That joint venture is now a reality, with Genting Malaysia also announcing on Tuesday that Hercules Topco LLC had been formed in the State of Delaware on 16 August 2019. Although still subject to regulatory approvals, completion of the proposed merger will see Hercules Topco LLC hold all common stock of Empire Resorts of which 15,714,606 will be contributed by Kien Huat and 13,200,000 by Genting (USA) Ltd. The latter will also pay Kien Huat US$9.4 million.
In providing its latest update on the proposed merger, Genting Malaysia also revealed that Hercules Topco LLC and Empire “will take efforts to delist Empire common stock from the Nasdaq Global Select Market and deregister Empire’s common stock under the United States Securities and Exchange Act of 1934, as amended, following successful completion of the Proposed Merger.”
The Malaysian IR operator has previously stated its intention to better position the Resorts World brand in the region through cross-marketing with Resorts World Casino New York City, attract additional customers from other states via those marketing efforts, achieve significant upside through revenue and cost synergies associated with providing arm’s length operating services to Empire, and leverage Genting Malaysia’s experience in the leisure and hospitality industry to enhance Empire’s ramp-up.
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