Greektown hires legal, financial team to aid in review of Gilbert offer

Posted on February 4, 2013

Greektown Superholdings Inc., the owner and operator of Greektown Casino-Hotel, has retained financial and legal advisers to assist in its review of an acquisition offer by Rock Gaming LLC’s Athens Acquisition LLC.

Greektown said in a press release that it has retained New York-based Lazard Freres & Co. LLC to act as its financial adviser and Washington, D.C., law firm Sullivan & Cromwell LLP to act as its special counsel.

Greektown formed a special committee of its board of directors, composed of three people, on Jan. 17 to assist the Greektown board of directors in reviewing the offer.

The committee is evaluating the Athens offer and other strategic alternatives for shareholders.

Greektown said “there can be no assurance that such evaluations will lead to any definitive offer, that any agreement will be reached or that any transaction will be consummated.”

“The special committee urges the company’s shareholders not to take any action until (it) has had the opportunity to fully evaluate the Athens correspondence and the company’s other strategic alternatives,” Greektown said.

As reported by Crain’s in mid-January, Dan Gilbert’s Rock Gaming, through Athens, said it had entered an agreement to acquire a majority share in Greektown, following its purchase of a minority share in the casino last summer.

Gilbert, who is chairman of Rock Gaming, and President and COO Matt Cullen have applied with the Michigan Gaming Control Board for gambling licenses.

With those approvals in hand, Athens plans to exercise its Dec. 20 agreement to buy a block of shares that will give it majority control of Greektown Casino-Hotel owner/operator Greektown Superholdings Inc., Cullen told Crain’s.

In mid-January, Rock/Athens offered to buy the remaining shares in Greektown for $81 per share.

Greektown’s board of directors put in place a shareholder rights plan or “poison pill” on Dec. 30. The board said the measure was meant to protect the interests of minority shareholders by financially penalizing anyone who attempted to acquire shares by negotiating with individual shareholders rather than the board of directors.

Greektown and that plan are now facing a challenge from an unnamed shareholder who has questioned the legality of the rights plan under Delaware law where Greektown is incorporated.

That challenge has spurred the Michigan Gaming Control Board to launch a review to ensure the legality of the plan under both Delaware and Michigan law. That review is being conducted with assistance from the Michigan attorney general, Executive Director Richard Kalm told the board’s directors during its Jan. 22 public meeting.

Greektown is also facing a challenge from the state gaming control board for passing the shareholder rights plan without written consent from the gaming board. Kalm said he informed the casino owner and operator that it needed the board’s approval.

Sherri Welch, Crain’s Detroit Business.