LAS VEGAS, Feb. 23 /PRNewswire-FirstCall/ -- Boyd Gaming Corporation
(NYSE: BYD) announced today that it delivered a non-binding preliminary
indication of interest (the "Indication of Interest") to the Board of
Directors of Station Casinos, Inc. ("Station").
The full text of the Indication of Interest delivered to Station follows:
February 23, 2009
Board of Directors
Station Casinos, Inc.
1505 South Pavilion Center Drive
Las Vegas, NV 89135
Attention: Frank J. Fertitta III, Chairman, President and Chief Executive
Officer
Dear Frank:
Boyd Gaming Corporation ("we" or "Boyd") is pleased to submit this
non-binding preliminary indication of interest (a "Proposal") with respect to
Station Casinos, Inc. ("Station" or the "Company").
Transaction
Boyd is interested in exploring an acquisition of 100% of the OpCo Assets.
In addition, should the Company determine to pursue sale transactions with
respect to the PropCo Assets, we would consider an acquisition that includes
those assets as well. The terms "OpCo Assets" and "PropCo Assets" are defined
below under the heading "General."
Rationale
We believe that Boyd is uniquely qualified to operate the assets of
Station. We are dedicated to operating first class casino entertainment
facilities and have demonstrated this commitment within the Las Vegas market
for over thirty years.
Key Assumptions and Value Drivers
This letter is based on publicly available information. We have made
numerous assumptions concerning the OpCo Assets, the PropCo Assets and the
Land Loan (defined below under the heading "General"). These assumptions
include continued operation of the business in the ordinary course.
There are certain key drivers and assumptions that may change our views,
either positively or negatively, which we plan to further investigate during a
formal due diligence process.
Valuation
Based on available public information, we estimate that the enterprise
value of the OpCo Assets is approximately $950 million. Subject to the
completion of a due diligence review to Boyd's satisfaction, including
confirmation of the estimated enterprise value of the OpCo Assets, Boyd would
be prepared to offer this amount in cash to existing stakeholders to acquire
the OpCo Assets following, or as part of, the reorganization of Station. We
believe this value would present a superior recovery to the unsecured
creditors of Station versus the current Exchange Offer as outlined in the
Company's Form 8-K filed on February 4, 2009. We would be interested in
pursing a transaction to acquire the Station assets as either a "stalking
horse bidder" pursuant to Section 363 of the Bankruptcy Code or, as a
co-sponsor or plan proponent (with Station or other applicable debtor) in a
consensual plan of reorganization or, in the alternative, as a competing plan
proponent, in each case pursuant to Chapter 11 of the Bankruptcy Code.
Financing
As of December 31, 2008, Boyd had approximately $2 billion in available
liquidity under its Revolving Credit Facility. We have sufficient liquidity
to finance a cash transaction consistent with the terms outlined in this
Proposal.
Conditions and Approvals
Boyd considers the publicly available information to be very limited, and
completion of detailed due diligence may lead us to substantially modify this
Proposal or to decide not to make a binding offer.
Boyd envisions that any binding offer would be subject to the satisfaction
or waiver of customary conditions, including, the completion of a due
diligence review to Boyd's satisfaction; the negotiation and execution of
definitive agreements containing terms and conditions satisfactory to Boyd;
obtaining all required governmental, regulatory and third-party approvals or
consents; and confirmation of the Plan of Reorganization by the Bankruptcy
Court pursuant to the provisions of the Bankruptcy Code, or approval of a
purchase of the OpCo Assets pursuant to an order of the Bankruptcy Court,
among other conditions.
Due Diligence
In order to be in a position to deliver a binding offer, we will need to
meet with Station's key managers and visit Station's casino properties. In
addition, we and our advisors will need to complete customary commercial,
operating, equipment condition, financial, tax, business integration,
environmental and legal due diligence. We are confident that we will be able
to complete our due diligence expeditiously once detailed due diligence
information is made available to us. In doing so, we will seek to minimize
any disruption to the business of the Company.
Timing
The submission of this Proposal has been approved by Boyd's Board of
Directors, and the Proposal has the full attention of Boyd management. We are
prepared to commit the necessary resources to complete a transaction as
quickly as possible. Boyd's financial and legal advisors are prepared to
immediately commence the due diligence process and proceed expeditiously.
Following execution of a definitive purchase agreement, we anticipate
consummating a transaction promptly following receipt of all required consents
and approvals, including those approvals required by the Bankruptcy Court and
the Nevada Gaming Commission, Nevada Gaming Control Board and other regulatory
bodies.
Financial Advisor
Boyd has retained UBS Securities LLC as its financial advisor in
connection with its evaluation of Station. Responses to or questions
regarding this non-binding Proposal should be directed to:
James Stewart Soren Reynertson
Managing Director Managing Director
UBS Securities LLC UBS Securities LLC
Phone: 310.556.6720 Phone: 212.821.3467
General
For purposes of this Proposal, "OpCo Assets" means all of Station's assets
other than (i) the assets that secure the CMBS mortgage loan and related
mezzanine financings, due November 12, 2009 (the "PropCo Assets"), and (ii)
the assets that secure Station's $250 million delay-draw term loan due
February 7, 2011 (the "Land Loan").
This Proposal is a non-binding indication of interest only, and does not
constitute a binding or enforceable agreement to consummate, or to negotiate,
submit a binding offer or otherwise proceed with, any transaction. We will be
legally bound only when and if we execute a definitive agreement in form and
substance satisfactory to Boyd and subject to the conditions contained
therein. This letter does not create a binding legal obligation on Boyd to
make a binding offer, enter into a definitive agreement, complete any
transaction or in relation to any other matter. Among other things, any legal
obligation binding on Boyd will be subject to approval of our Board of
Directors and execution of a definitive agreement satisfactory to us in our
sole discretion.
We are enthusiastic about the opportunities presented by our Proposal and
we look forward to hearing from you at your earliest convenience.
Yours sincerely,
Boyd Gaming Corporation
Keith E. Smith William S. Boyd
President and Chief Executive Executive Chairman of the Board of
Officer Directors
Forward Looking Statements
This press release contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. Such statements contain words
such as "may," "will," "might," "expect," "believe," "anticipate," "could,"
"would," "estimate," "continue," "pursue," or the negative thereof or
comparable terminology, and may include (without limitation) information
regarding Boyd's expectations, goals or intentions regarding the future,
including, Boyd's preliminary non-binding indication of interest to acquire
certain of the Station assets and the estimated enterprise value of OpCo,
among other things. These forward-looking statements are subject to business
and economic risk and reflect the current expectations of Boyd, and involve
subjects that are inherently uncertain and difficult to predict. Actual
results could differ materially from these forward-looking statements because
of factors such as: the possibility that Boyd's preliminary non-binding
indication of interest will be rejected by Station's board, bondholders or
other lenders; the possibility that Station, Station's bondholders or other
lenders and Boyd will be unable to reach agreement on the terms of the sale of
certain Station assets; the possibility that, even if Boyd does enter into a
transaction with Station, the transaction will not close or that the closing
may be delayed; the effect of the announcement of the preliminary non-binding
indication of interest on Boyd's lenders, strategic relationships, operating
results and business generally; the effects of competition, litigation,
financial community and rating agency perceptions; changes in laws and
regulations; economic, credit and capital market conditions; and other factors
described in Boyd's SEC filings (including Boyd's Quarterly Report on Form
10-Q for the quarter ended September 30, 2008) and in Boyd's other current and
periodic reports filed from time to time with the SEC. All forward-looking
statements in this press release are made as of the date hereof, based on
information available to Boyd as of the date hereof, and Boyd assumes no
obligation to update any forward-looking statement.
SOURCE Boyd Gaming Corporation
-0- 02/23/2009
CONTACT:
Financial, Josh Hirsberg, +1-702-792-7234,
joshhirsberg@boydgaming.com, or
Media, Rob Stillwell, +1-702-792-7353,
robstillwell@boydgaming.com,
both of Boyd Gaming Corporation/
Web Site: http://www.boydgaming.com
