Isle of Capri plans to buy Lady Luck

Published 12:00 am Wednesday, October 6, 1999

In a more than $400 million deal, Isle of Capri Casinos Inc. announced plans Wednesday to buy Lady Luck Gaming Corp.

Biloxi-based Isle of Capri will pay $12 per share, or $59 million, for Las Vegas-based Lady Luck’s outstanding shares, $22 million for Lady Luck’s preferred stock, and assume the company’s $177 million debt.

The deal would make Lady Luck’s dockside casino in Natchez part of a company which owns and operates seven casinos in Tunica, Biloxi, Vicksburg, Louisiana and Colorado.

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Lady Luck also operates a dockside riverboat casino and hotel in Coahoma County, and has a 50 percent interest in a casino and hotel in Bettendorf, Iowa.

Isle of Capri also operates a harness racing track in Pompano Beach, Fla., and the Enchanted Capri cruise ship that sails out of New Orleans.

Isle of Capri has considered Natchez for a casino site before. The company had a license for a casino in Natchez in 1991 but did not build one, according to the gaming commission, because the site was not up to par.

&uot;We’re glad to be able to come back and be a productive member of the community,&uot; said Isle of Capri Chief Financial Officer Rex Yeisley, who did not know why Isle of Capri did not follow through with its original Natchez plans eight years ago.

Lady Luck built its casino in 1993.

Yeisley said he hopes the deal &uot;means nothing but good things&uot; for Natchez.

He said Lady Luck employees could become Isle of Capri employees under the deal, but he did not know whether the Natchez casino would take on the Isle of Capri name.

Lady Luck’s size and geographic diversity were among the attractions for Isle of Capri, Yeisley said.

The deal still hinges on financial and regulatory approvals from gaming commissions in Mississippi, Nevada and Iowa.

Larry Gregory, deputy director of the Mississippi Gaming Commission, said the commission will meet with Isle of Capri officials before the end of the year to review the merger plans.

&uot;Since Isle of Capri is already an established company in Mississippi, they probably have most of the permits they need state and local agencies,&uot; Gregory said. &uot;They will also have to license any individuals that are not working for the companies in Mississippi now.&uot;

Analysts said the Biloxi-based Isle of Capri was getting the company at a price considerably lower than what Lady Luck was worth, as well as a lucrative presence in Las Vegas.

”This industry is consolidating,” said Daniel Davila, a senior analyst for leisure and entertainment with South Coast Capital LLC in New Orleans. ”(Isle of Capri) wants to be a preeminent regional provider of gaming-based entertainment. They are quickly becoming the major player in the regional markets.”

Isle of Capri said it has a letter of intent to buy the remaining 50 percent stake in the Bettendorf operation from the family of its chairman, Bernard Goldstein, in exchange for 6.3 million shares of Isle of Capri common stock. That sale is subject to the completion of Isle of Capri’s acquisition of Lady Luck.

Bob Walsh, a spokesman for Lady Luck Gaming Corp., said his company’s plans to acquire the Miss Marquette Casino in Marquette, Iowa, for $41.7 million, and the Lady Luck Casino & Hotel in downtown Las Vegas for $45.5 million, will go as planned.

Terms of the acquisition call for Isle of Capri to give Lady Luck a $16.3 million secured loan to buy both properties.

Lady’s Luck majority shareholder, chairman and CEO Andrew Tompkins, confirmed Wednesday he would sell the 46 percent of outstanding shares he owns to Isle of Capri.

Staff writer Nita McCann and The Associated Press contributed to this report.