On behalf of Full House’s Board of Directors, Bradley Tirpark, Chairman, and Daniel Lee, President, sent a letter to Z Capital CEO James Zenni, which labelled Z Capital’s bid of $1.79 per share, valuing the company at $132.5m, as “not in the best interests of Full House Resorts and its stockholders.” 

The letter pointed out several issues with the proposal. A lack of a specific transfer structure and evidence of financing the payment was mentioned. The offered cost was described as a “price that dramatically undervalues the company’s business” and referenced Full House’s current and recent trading prices.

Detailing the problems with the fee, the letter indicated the price “represents a material discount of 35% to the company’s closing price on October 19, 2018” and “a discount of 40% to the company’s volume weighted average price during the preceding three months.”

The jurisdictional overlap between Affinity Gaming, a portfolio company of Z Capital, and Full House was said to present significant execution risks.

The letter reminded Z Capital of the original purpose behind its September meeting in Illinois; Full House expressed interest in potentially acquiring certain aspects of Affinity Gaming’s assets.