Esplanade Capital Raises Offer For Archon Corporation to $18.50 Per Share

Esplanade Capital LLC, the second largest outside shareholder (based on Bloomberg data) of Archon Corporation (OTC: ARHN), has raised its offer to acquire all outstanding shares of Archon Corporation to a price of $18.50 per share in a negotiated transaction, subject to confirmatory due diligence. Esplanade Capital has delivered a letter to Archon's board of directors, the full text of which follows:

For Delivery on June 4, 2013

Archon CorporationBoard of DirectorsAttention: Suzanne Lowden, Secretary2200 Casino DriveLaughlin, NV 89029

Dear Members of the Board of Directors:

It has been more than two months since Esplanade Capital LLC (“Esplanade” or “we”) made an offer to acquire Archon Corporation (the “Company”) at $17.50 per share, which represented a blockbuster 61.6% premium based on historical trading prices. Despite our repeated attempts to reach out to the Company, the Board has basically ignored our requests and refused to meet with us.

Notwithstanding your stonewalling, we remain extremely committed to pursuing a negotiated transaction to acquire all of the outstanding shares of the Company. In fact, we are now raising our offer to $18.50 per share, subject to confirmatory due diligence. We believe our premium offer is in the best interests of all shareholders and the most direct path to maximize value for all shareholders.

We have the resources and experience to close this acquisition. Esplanade has been investing for over 13 years. To assist us in this transaction, we expect to be working with a longtime outside relationship who has built an impeccable track record of several billion dollars worth of real estate acquisitions, restructurings, and recapitalizations over the past three decades. With the Company’s cooperation, we are highly confident in our ability to finance this transaction based on discussions with our network of equity and debt financiers. We are also prepared to immediately commence negotiations on an acquisition agreement.

We continue to view the Company’s stock as undervalued and underperforming. Unfortunately, we have no confidence that the Company’s stock will improve under the existing Board and management. We believe that the Company seems to be run as the personal fiefdom of Mr. Paul Lowden and not for the benefit of all shareholders given the series of related party transactions between the Company and the Lowden family, the Company “going dark” in 2011 and the galling lack of responsiveness to our requests as a concerned shareholder. We remind the Board that it has fiduciary duties to all shareholders, and not just to Paul Lowden and his family.

We also would like to take this opportunity to respond to the numerous mischaracterizations of Esplanade and our offer that appeared in Mr. Lowden’s interview in the Las Vegas Review Journal on April 15 and Mrs. Lowden’s letter to Esplanade on the same date:

1. In his interview with the Las Vegas Review Journal, Mr. Lowden was quoted as saying that our offer “wasn’t really a serious offer.” I founded Esplanade over 13 years ago. Barron’s, Bloomberg, Reuters, and other international media have profiled us repeatedly over the years. Even if the Board chose to ignore Esplanade’s credentials, we wonder how any board of directors can make such a determination without even having a five minute conversation with the person making the offer.

2. In the same interview, Mr. Lowden claimed that we “made a similar offer in 2008.” We did no such thing. We did write Mr. Lowden a letter in 2008 (to which he, of course, did not reply) stating: “Given the intrinsic value of the company and the current balance sheet, I cannot imagine a better time for opportunistic company stock buybacks on at least a small scale if not a major self-tender. I believe we will all look back on this day and wish that the company had bought back stock hand over fist.” In short, we suggested that the Company buy back stock as it had done in the past. Contrary to Mr. Lowden’s mischaracterization, this is not a “similar offer.”

3. In her April 15th letter to Esplanade, Mrs. Lowden responds to our offer letter, stating: “It’s unclear to whom it is directed” and “the letter does not contain a proposal upon which the Board of Directors can take any action.” At the risk of repeating ourselves, subject to confirmatory due diligence, Esplanade is proposing to the Archon Corporation Board of Directors to acquire all outstanding shares of Archon Corporation in a negotiated transaction through a merger agreement that would be subject to approval by the Company’s shareholders.

While we would prefer to negotiate an acquisition privately, the Company’s response so far indicates that the Board prefers to do otherwise. Accordingly, we are concurrently releasing this letter to the press in perhaps the vain hope that we will finally receive a serious response to our offer.

We urge the Board to cease its stonewalling and embrace its fiduciary duties by immediately commencing negotiations with us or publicly committing to a sales process with a level playing field.

Very truly yours,

Shawn W. Kravetz

President

Archon (CE) (USOTC:ARHN)
過去株価チャート
から 11 2024 まで 12 2024