"VCAT has agreed to a period of exclusive negotiations with IGT pursuant to an exclusivity agreement. The proposal may be modified, supplemented or withdrawn by IGT at any time."
VCAT Announces Receipt of an Acquisition Proposal from International Game Technology at $2.58 Per Share Business Editors
SAN DIEGO--(BUSINESS WIRE)--June 15, 2006-- Venture Catalyst Incorporated ("VCAT") (OTCBB:VCAT), announced today that it has received a proposal from International Game Technology ("IGT") (NYSE:IGT) to acquire all of VCAT's outstanding shares for $2.58 per share in cash.
The proposed transaction would be in the form of a merger with a wholly-owned subsidiary of IGT. Immediately following the merger, it is anticipated that VCAT's gaming consulting services division (exclusive of its Mariposa software division) would be sold to an entity controlled by certain members of VCAT's current management, including L. Donald Speer, II, VCAT's Chairman of the Board and largest shareholder, for approximately $4.5 million in promissory notes. It is anticipated that the new consulting entity comprised of L. Donald Speer, II and the executive management team in VCAT's current consulting services division, would continue to provide services to the Barona Group of Capitan Grande Band of Mission Indians and to other clients. The purchasers of the gaming consulting services division would also enter into a three year consulting agreement with IGT.
The Board of Directors has appointed a special committee (the "Committee"), comprised of John Farrington and Cornelius E. ("Neil") Smyth, both of whom are disinterested directors, to review the proposed transaction. The Committee has engaged Duff & Phelps, LLC as its financial advisor and the law firm of Paul, Hastings, Janofsky & Walker LLP as counsel to the Committee to assist it in its evaluation of the proposal.
VCAT has agreed to a period of exclusive negotiations with IGT pursuant to an exclusivity agreement. The proposal may be modified, supplemented or withdrawn by IGT at any time.
Any proposed acquisition will be subject to, among other things, (a) obtaining any necessary third-party consents or waivers, including the Barona Group of Capitan Grande Band of Mission Indians; (b) applicable regulatory approvals, including the Barona Gaming Commission; (c) the negotiation, execution, and delivery of definitive agreements; (d) approval of the proposed transaction by the Committee, the full Board of Directors and VCAT's shareholders; and (e) receipt of a fairness opinion by the Committee.
The Board of Directors cautions the Company's shareholders and others considering trading in its securities that there can be no assurances that any definitive offer by IGT will be made nor that any definitive agreement will be approved or consummated between the parties.
Any proposed acquisition may only be completed in accordance with applicable state and federal laws. This press release shall not constitute an offer or a solicitation of an offer to buy any securities nor shall it constitute a solicitation of a proxy to vote with respect to any transaction.
If the parties sign a definitive merger agreement, VCAT will be filing a proxy statement and other relevant documents concerning the transaction with the Securities and Exchange Commission (the "SEC"). SHAREHOLDERS OF VCAT ARE URGED TO READ THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE FORM 8-K FILED IN CONNECTION WITH THIS PRESS RELEASE, WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and security holders can obtain free copies of the proxy statement and other documents when they become available by contacting Investor Relations, VCAT, 591 Camino De La Reina, Suite 418, San Diego, California 92108. In addition, documents filed with the SEC by VCAT will be available free of charge at the SEC's web site at http://www.sec.gov.
If the parties sign a definitive merger agreement, VCAT and its executive officers and directors may be deemed to be participants in the solicitation of proxies from the shareholders of VCAT in favor of the acquisition. Information about the executive officers and directors of VCAT and their ownership of VCAT common stock will be set forth in VCAT's proxy statement which will be filed with the SEC. Certain directors and executive officers of VCAT may have direct or indirect interests in the merger due to securities holdings, pre-existing or future indemnification arrangements, vesting of options, or rights to severance or retention payments in connection with the merger. Additional information regarding VCAT's and the interests of its executive officers and directors in the acquisition, will be contained in the proxy statement regarding the acquisition that will be filed by VCAT with the SEC.
This press release contains forward-looking statements that are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995, particularly those statements regarding the effects of the proposed transaction and those preceded by, followed by or that otherwise include the words "believes," "expects," "anticipates," "intends," "estimates," or similar expressions. Forward-looking statements relating to expectations about future results or events are based upon information available to VCAT as of today's date, and VCAT does not assume any obligations to update any of these statements. The forward-looking statements are not guarantees of the future performance of VCAT and actual results may vary materially from the results and expectations discussed. For instance, although IGT has offered to acquire all of the outstanding stock of VCAT, no definitive agreements have been executed and any such acquisition would be subject to various conditions.
About VCAT
VCAT is a provider of consulting services and technology in the gaming and hospitality market. VCAT is headquartered in San Diego, California and has offices in Las Vegas, Nevada.
About IGT
International Game Technology (http://www.IGT.com) is a global company specializing in the design, development, manufacturing, distribution and sales of computerized gaming machines and systems products.
KEYWORD: NORTH AMERICA CALIFORNIA UNITED STATES INDUSTRY KEYWORD: ENTERTAINMENT CASINO/GAMING TRAVEL LODGING PROFESSIONAL SERVICES CONSULTING MERGER/ACQUISITION SOURCE: Venture Catalyst Incorporated
CONTACT INFORMATION: Venture Catalyst Incorporated Kevin McIntosh, 619-330-4000
Posts: 333 | Registered: Mar 2006
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posted
whats the use birkoff.. the share price would have already gapped up to that level by begining of the day!!!!! had the news been announced before bell.. it would have been good. i hate mergers.. they are always announced after bells
-------------------- All my posts are based on my own opinions and not to be taken as buy/sell recommendations. Posts: 961 | Registered: May 2006
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They are reporting over six-million in revenue but are reporting a net loss. This makes little sense for consulting service which should have low overhead or control of overhead. Consulting services do not sell hard goods, they sell advice through lunches, meetings, public relations and such. Costs are easy to control.
When I read a consulting agency providing services to an Indian tribe, I think Tom DeLay.
Charges for consulting are way out of line. Based on their monthly fee, no way is this company providing a degree of services which warrant such high fees.
Another problem is these Indian contracts are time limited. Those contracts will expire in the new future. In time, those contracts are worth zero dollars.
Why would a company want to buy them out?
Maybe this buy out company sees potential for making contracts with other tribes? Doubtful. Other tribes moving to casino operations are already bound up with similar companies.
Share price is currently over-valued. Yes, good revenues but a net loss. Those revenues will cease to exist in the near future. Why do traders have a perception this company is worth the price?
Maybe traders are hedging a bet on their software. However, software is not the revenue generator. Their software is generating roughly two-million dollars LOSS per quarter. Something is not right.
"The proposed transaction would be in the form of a merger with a...."
What are your thoughts on this merger? Seems odd. No changes in VCAT, just a change in parent company ownership. VCAT insiders are clearly to make a good profit, but not VCAT itself.
Why such a high per share price for a company which is reporting losses? Contracts are to end, software is a big loser, no change in management.
This is obviously a news play only. This will generate a change in share price, up or down, and will not last long or should not last long.
This news is not a done deal. Wording almost imparts a message the deal will not be completed.
Problem here is a vast majority of traders out there are ignorant newbies. They will only read the headlines, see the big share price offer and react accordingly.
This suggests prices will skyrocket, over the next few business days. Will this happen? I do not have a clue.
Contrasting this, experienced traders, like us, will perform some research and discover, as I have, something is not right. This will keep serious trader money out of the market.
Based on past examples of circumstances like this, you should see a good gap up before market, a frenzy of buying, then a few hours later, a dip in prices, then _maybe_ a gradual climb in prices into late day.
Risk here is Market Makers will take prices up to the maximum customer bid price then add a bit for their own profit. Be sure Market Makers will load up by front running. They will buy all low ask offers, run prices up and then some, followed by selling into those willing to buy higher prices. When Market Makers run out of shares, prices will begin to fall, Market Makers will push prices even lower, load up, then run prices upward again.
I am fairly confident a best play is do what the Market Makers are doing. Disadvantage is the before market gap up. A best play would also be to get in and get out as quickly as possible to reduce risks.
Your decision, Bubba. This one is hinky and unpredictable. I will watch but rather doubtful I will play.
My final analysis, which you will enjoy and find very useful, I do not have a single f-in clue what will happen.
I will send you a bill for my consulting services and advice.
Thank you so much for great analysis. You did not have to stay up so late!!
I was thinking about quick get in/out, but I'm still kinda hesitant as I've seen the magic 2.17 in NDOL and it never got close to it. Got out with a profit, but it was getting shady very quickly.
Anyway, right now B/A 1.35 / 1.38
I may stay away ...dont know yet..
Posts: 333 | Registered: Mar 2006
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quote:Originally posted by Birkoff: Bah...too high to get in for me...
toldya... .. but dont worry.. day traders will sell it and buy it forever and you can make good profits if you are good at flipping. i have radared it for entry. thx!
-------------------- All my posts are based on my own opinions and not to be taken as buy/sell recommendations. Posts: 961 | Registered: May 2006
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posted
The only thing that will save the holders is if there is actually a merger and the price is received by the holders, simple no brainer. Would have been good for the run up though, if one new when to exit. Just to play it safe. Posts: 4245 | From: SMALLVILLE USA | Registered: May 2004
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Only way to really play a news run like this is to catch breaking news during market hours.
The morning gap up before we can buy ruins any true potential for profit.
Contrasting this is very high volume will moderate prices allowing lower risk day trading. High volume allows for a slower more gradual upward run which we can buy into with lower risks, but risks are there.
Yep, extreme spikes like this on low volume are very risky. As you suggest, usually an extreme downward spike will take place after the upward run is finished. Based on what I have watched over the years, the downward spike will be a fifty percent drop from the high of the day.
For now, there are some hints prices will remain stable somewhere around current levels, maybe a little drop over the day.
I do not think this one is good for day trading now that the morning rush hour is over.
show me financials of BKMP, and ADNL... oh they dont have any. you are a P&D spin doctor bingo
-------------------- All my posts are based on my own opinions and not to be taken as buy/sell recommendations. Posts: 961 | Registered: May 2006
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not yet birk.. lol.. am waiting for daytraders to dump early monday morning, and bring the price down, maybe some weaks will let off their shares and then i will try to get in, ride it for the day and leave it at the end of the day. a decent 5% is all i am asking for ..
-------------------- All my posts are based on my own opinions and not to be taken as buy/sell recommendations. Posts: 961 | Registered: May 2006
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