Dover Downs Gaming & Entertainment Inc is to combine with Twin River Worldwide Holdings, following an announcement that the parties have entered a definitive merger agreement.
In a move that would transform Twin River into a publicly traded company, the proposed merger would see Dover Downs shareholders exchange their stock for Twin River common shares, representing 7.225% of the equity in the combined company at closing.
Intended to qualify “as a tax-free reorganisation,” the Dover Downs board of directors has unanimously approved the transaction, and has recommended that Dover Downs’ stockholders approve the merger.
Denis McGlynn, Dover Downs’ President and CEO, stated, “Becoming part of Twin River is transformational for us. We have been impressed with the depth and talent of the Twin River organisation and their operational capabilities.
“We believe this transaction will help us grow our business, invest in our people and our facilities and compete more effectively given changes in gaming on the horizon. We expect to see many positive benefits for the state, the Delaware Lottery and our employees and stockholders.”
Jeffrey W. Rollins, a director and member of the audit committee of Dover Downs is expected to join the Twin River Board of Directors post-closing, pending regulatory approval.
Via the proposed merger Twin River, whose net revenue for the fiscal year ended December 31, 2017 stood at $428.8m, would reach a new geographical location in the Mid-Atlantic region.
The company’s current operations stretch to the ownership and management of two casinos in Rhode Island, one in Biloxi and a Colorado based racetrack complete with off-track betting licenses.
John E. Taylor Jr, Twin River executive chairman, said, “We’re excited about the many benefits we believe we will realise from the combination. Dover Downs and its team are experienced in not only brick and mortar casino operations, but in sports betting, which we think will be helpful as we introduce that amenity at our properties, and in the online gaming sector which continues to evolve nationwide.
“Equally important, we see real opportunities to grow the Dover Downs business through investment in its people and facilities, similar to what we have achieved with our other assets over the past several years.
Adding: “We’ve been focused on growing the overall business for some time now as a means to create greater shareholder value, expand our geographic footprint to achieve financial economies and strengthen our financial position.
“This merger should well position us to achieve all three objectives in a context in which existing shareholders of Twin River who desire it could obtain liquidity.
“We’re grateful for the strong partnership we enjoy with the State of Rhode Island at our flagship property, and we look forward to working equally effectively with the state of Delaware in maximising the potential of Dover Downs.”
The consummation of the merger is subject to regulatory approvals and other customary closing conditions.