The owner of the Colonial Downs in Virginia wants to sell his company to West Virginia-based MTR Gaming Group Inc., in exchange for $144.5 million in MTR stock.
Chief executive officer Jeffrey Jacobs made the unsolicited offer to sell Colorado-based Jacobs Entertainment Inc. in a letter arguing the deal would help MTR diversify, the Richmond Times-Dispatch reported May 21.
MTR owns Presque Isle Downs & Casino in Pennsylvania, Mountaineer Casino, Racetrack & Resort in West Virginia, and Scioto Downs Racino in Ohio. Jacobs Entertainment runs casinos in Colorado and Nevada, and has other gambling interests in Virginia and Louisiana. Regulatory filings show it also currently holds about 18% of MTR stock.
Jacobs noted his company has maintained strong financial performance through difficult economic times. MTR chief financial officer John Bittner didn't immediately comment on the proposal.
Jacobs contends MTR must diversify geographically and expand its holdings, and Jacobs Entertainment provides the "additional scale necessary to survive and compete."
Jacobs Entertainment also owns 10 off-track betting facilities in Virginia; The Lodge Casino at Black Hawk and the Gilpin Hotel Casino, both in Colorado; the Gold Dust West-Reno, the Gold Dust West-Carson City, and the Gold Dust West-Elko in Nevada; and 23 video poker truck stops in Louisiana.
Jacobs said the company anticipates a profit of $61.5 million this year.
MTR Gaming Group in April announced that president and CEO Jeffrey Dahl will leave the company to pursue other business opportunities.