The Board of Directors of gaming operations company Entertainment Gaming Asia Inc says it “expresses no opinion and remains neutral” towards an unsolicited cash tender offer by Melco International Development Ltd to purchase all shares in the company.
Melco International Development, which already owns 65% of shares in Entertainment Gaming Asia, filed the offer on 19 May to acquire all remaining shares at a price of US$2.35 net per share.
Having stated at the time that it would review the offer before offering its recommendation, the Board said over the weekend that it, “has decided to remain neutral with respect to the offer due to the significant overlap between the Board and the board of directors of Melco and its key subsidiaries.
“Because of these significant overlaps, the Board believes that, with the exception of the one director, all of the members of the Board have an actual or potential conflict of interest in evaluating the offer. As a result, the Board believes each stockholder should make their own decision whether to accept or reject the offer based upon each individual stockholder’s particular investment objectives and circumstances and their own consideration and evaluation of all of the Company’s publicly available information.”
Entertainment Gaming Asia reported a 31% decline in year-on-year revenue for the first quarter of 2017, down to US$416,000 from US$604,000, largely due to the expiration of its EGM leasing agreement with Leisure World VIP Slot Club on 30 June 2016 and lower average daily net win per unit.
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