Golden Gaming to take over Maryland casino in merger with Minnesota company

Blake Sartini in the Gold Bar, a private enclave in Golden Gaming headquarters, on Thursday, Feb. 2, 2012.

Golden Gaming is growing again — this time beyond state lines.

The Nevada tavern and slot route operator announced today that it’s merging with Minnesota-based casino company Lakes Entertainment. The new company will be renamed Golden Entertainment, and it will be publicly traded on the Nasdaq.

As a result of the merger, Golden Gaming will control the Rocky Gap casino owned by Lakes in Maryland. Lakes also has investments in other casinos through a 10 percent interest in Rock Ohio Ventures, but the company said it’s selling that interest to an “unrelated third party” for $750,000.

In addition to being the largest slot route operator in Nevada, Golden Gaming operates the PT’s pub empire as well as three casinos in Pahrump. The Las Vegas-based company recently acquired four Irish-themed taverns in the valley.

Golden Gaming CEO Blake Sartini will become the chairman and CEO of the merged company, while Lakes CEO Lyle Berman will stay on as a board member, according to a statement. Berman will also sign a three-year consulting agreement.

Berman said in the statement that the merged company will be well-positioned for growth not only in Nevada but also in other areas. Sartini suggested that more growth is in store, too.

“We believe that this transaction establishes a truly diversified gaming company, uniquely positioned to capitalize on a wide spectrum of opportunities,” Sartini said in the statement. “This merger with Lakes provides the opportunity to expand our business dramatically, both in and outside of Nevada, with the support of a strong balance sheet, the Rocky Gap asset in Maryland and an aggressive and experienced management team.”

Lakes will be valued at $9.57 per share under the terms of the merger agreement, which represents a premium of about 37 percent from the company’s Friday closing price, according to the statement.

The merger is set to issue Golden Gaming upwards of 7.8 million shares of Lakes stock — about 35.7 percent of the total post-merger shares. Current Lakes shareholders and option holders will retain the remaining 64.3 percent, the statement said.

Once combined, the new company will operate about 9,250 slot machines and video lottery terminals, 48 taverns and more than 600 route locations.

The merger is expected to close by the end of this year, but it still needs approval from regulators and Lakes shareholders.

Gaming

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