Mr. Steven Michels reports
EVERGREEN GAMING CORPORATION ANNOUNCES AMENDMENT TO ARRANGEMENT AGREEMENT WITH MAVERICK GAMING LLC
Evergreen Gaming Corp. has entered into an amending agreement dated Nov. 30, 2022, to the previously announced arrangement agreement between the company, Maverick Gaming LLC, Maverick Acquisition Canada ULC (Acquisitionco) and Len Libin in his capacity as shareholder representative, dated Sept. 8, 2022. Under the Maverick agreement as amended by the amending agreement, Acquisitionco will acquire all of the outstanding common shares of Evergreen at a price of 60.5 U.S. cents per share, subject to adjustment as set out hereafter, by way of a statutory plan of arrangement under Section 288 of the Business Corporations Act (British Columbia).
The company's entry into the amending agreement follows upon the determination by the company's board of directors, announced Nov. 24, 2022, that an unsolicited non-binding proposal from TIL Gaming LLC for the acquisition of all of the issued and outstanding common shares of the company not already owned by TIL, its affiliates or the company constituted a superior proposal as that term is defined in the Maverick agreement. At a meeting of the board held today, the board determined that the amending agreement results in the TIL offer ceasing to be a superior proposal. The amending agreement will be filed on SEDAR.
Under the amended arrangement agreement, Maverick has not only matched the 60.5-U.S.-cent price per share offered under the TIL offer, subject to adjustment, but has also matched the provisions of the TIL offer relating to closing cash (as defined in the Maverick agreement), including lowering the threshold of the closing cash condition precedent from $28-million (U.S.) to $25-million (U.S.) and lowering the price adjustment threshold from $26-million (U.S.) to $23-million (U.S.), as more particularly described hereafter. In all other material respects, the transaction contemplated in the amended arrangement agreement is the same as the transaction contemplated in the Maverick agreement, as described in the notice of special meeting of shareholders and management proxy circular of the company dated Oct. 21, 2022.
Under the price adjustment provisions of the amended arrangement agreement:
If closing cash is less than $17.6-million (U.S.) and Maverick, in its sole discretion, waives its termination rights under the amended arrangement agreement, the aggregate effective time consideration (and the consideration payable at closing in respect of common shares acquired under the initial purchase agreement (as defined in the amended arrangement agreement and circular)) will be reduced by $5.4-million (U.S.) in the aggregate, and the amount of the consideration payable per share at the effective time (as defined in the circular) will be adjusted accordingly.
If the closing cash is less than $23-million (U.S.) and more than $17.6-million (U.S.), and Maverick, in its sole discretion, waives its termination rights under the Maverick agreement, the aggregate effective time consideration (and the consideration payable at closing in respect of common shares acquired under the initial purchase agreement) will be reduced by the aggregate amount that is equal to the difference between: (i) $23-million (U.S.); and (ii) the amount of the closing cash and the amount of the consideration payable per share at the effective time will be adjusted accordingly.
It continues to be the case that, if the consideration is reduced and if, following the effective date, the company receives ERC claims (as defined in the circular) recovered by the company and its affiliates as contemplated under the Maverick agreement, the consideration (and the consideration payable in respect of common shares acquired under the initial purchase agreement) will be increased by an amount equal to the lesser of: (i) the amount of all ERC claims recovered by the company and its affiliates as contemplated under the Maverick agreement after the effective date; and (ii) the effective time consideration reduction amount.
Updated notice of special meeting
Shareholders are reminded that a special meeting of company shareholders, originally scheduled for Nov. 24, 2022, and postponed, is scheduled for Dec. 8, 2022, to consider and, if thought fit, to approve the arrangement resolution, as defined in the amended arrangement agreement, with respect to the arrangement under Section 288 of the Business Corporations Act (British Columbia) contemplated in the amended arrangement agreement. In that regard, the board reaffirms the company board recommendation and unanimously recommends that shareholders vote in favour of the arrangement resolution.
The meeting will be held at 2 p.m. local time at the offices of Miller Titerle Law Corp., 300, 638 Smithe St., Vancouver, B.C., V6B 1E3. The record date for the determination of shareholders entitled to receive notice of and vote at the meeting, and any adjournment or postponement of the meeting, remains the close of business Pacific Daylight Time on Oct. 21, 2022.
Updated notice of hearing for final order
Subject to the company receiving the required shareholder approval of the arrangement resolution at the meeting, the hearing in respect of the final order (as defined in the circular) is now proposed to take place on Dec. 14, 2022, in the court at 800 Smithe St., Vancouver, B.C., at 9:45 a.m. Pacific Standard Time. Any shareholder of the company or other person who wishes to appear, or to be represented, and to present evidence or arguments must serve and file a response to petition substantially in the form of Form 67 of the rules of court as set out in the notice of hearing of petition for final order, a copy of which was attached as appendix E to the circular, together with any evidence or material on which such shareholder or interested party intends to rely at the hearing, as provided in the interim order, a copy of which was attached as appendix D to the circular, and satisfy any other requirements of the court, by or before 4 p.m. Pacific Standard Time on the date that is two business days prior to the date of the hearing of the application for the final order.
About Evergreen Gaming Corp.
The company is in the business of overseeing the gaming operations of its principal U.S. subsidiary, Washington Gaming Inc. (WGI). WGI, through its subsidiary corporations, operates four casinos in Washington State: the Riverside Casino in Tukwila, Goldies Casino in Shoreline, and the Chips and Palace Casinos in Lakewood. The casinos are mini-casinos (or house-banked card rooms), which offer to persons of legal age a variety of card games of chance at which the player may win or lose money, a business commonly referred to as gaming. WGI also operates bars and restaurants in each casino.
About Maverick Gaming LLC
Maverick is a gaming company with over 3,000 dedicated team members. Maverick owns and operates a portfolio of 27 properties across Nevada, Washington and Colorado with over 1,800 slot machines, 350 table games, 1,020 hotel rooms and 30 restaurants. Maverick is a proud employer of Teamsters Local 117 workers at its Washington locations as part of its commitment to providing sustainable, family-wage jobs.
Founded in 2017 by industry veterans Eric Persson and Justin Beltram, Maverick takes a bold approach to a classic pastime. With an all-star leadership team from some of the largest gaming brands spanning markets the world over, Maverick is dedicated to delivering the best possible gaming experiences for every kind of player.
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