Gilbert company's buying spree boosts its ownership stake in Greektown, pending state OK

Posted on February 11, 2013

Dan Gilbert’s Athens Acquisition LLC has forged additional deals that would give it a 67.4 percent ownership stake and increased majority voting power in Greektown Superholdings Inc., if approved by the Michigan Gaming Control Board.

In a filing with the U.S. Securities and Exchange Commission, Athens said it entered into two additional agreements in January that would give it 76.8 percent of the voting shares of Greektown Superholdings and 67.4 percent ownership, pending approval from the gambling board.

According to the filing, Athens has agreed to pay more than $140 million for those shares — and it isn’t stopping there.

On Thursday, the company said it made offers to acquire the shares of capital stock held by two additional shareholder groups for $90 a share.

One Feb. 1, Athens withdrew its earlier offer to purchase the remaining shares of Greektown for $81 a share, saying it planned to negotiate directly with shareholders rather than the Greektown board in its bid to purchase additional shares.

“We look forward to meeting with Greektown’s special committee to continue this process and reaffirm our interest in the revitalization of this asset and the Greektown district,” Matt Cullen, president and COO of Rock Gaming LLC, wrote in an emailed statement.

Rock Gaming formed Athens to acquire shares of Greektown, the owner and operator of Greektown Casino-Hotel in Detroit.

Greektown declined to comment on the latest deals.

According to its Dec. 20 purchase agreements, Athens will pay a total of $78.1 million to purchase shares from funds and trusts affiliated with John Hancock Advisers LLC and Manulife Asset Management (US) LLC.

That, coupled with Athens’ June 2012 acquisition of a minority share of the company, would give it 50.8 percent ownership in Greektown Superholdings, subject to approval by the Gaming Control Board.

Through a Jan. 25 deal, Athens agreed to pay Oppenheimer Funds Inc. $12.9 million for additional shares. On Jan. 31, it agreed to pay funds associated with Solus Alternative Asset Management LP and Ultra Master Ltd. collectively $49.6 million for more shares.

Athens said in the SEC filing that it plans to elect a number of people to the Greektown board if the state gambling board approves deals that would give it voting control.

Athens said in the filing that it seeks the cooperation of the Greektown board and special committee formed to review all acquisition offers and dealings “so that valuable time and resources are not wasted.”

Athens said it has “significant concerns as to the propriety” of the Greektown board’s Dec. 31 adoption of a shareholder rights plan or “poison pill” without approval of the Gaming Control Board.

As Crain’s reported in January, members of the gambling board have expressed their own concerns about the Greektown board’s passage of the shareholder rights plan without prior written consent from the gaming board.

Sherri Welch, Crain’s Detroit Business.