Red Rock Resorts, Inc., (RRR) on Wednesday said it has commenced a “modified Dutch Auction” tender offer to purchase up to $350m in aggregate purchase price of its issued and outstanding shares of Class A Common Stock.
The company said the price per share will be not greater than $53.00 nor less than $46.00, paid to the seller in cash, less any applicable withholding taxes and without interest.
According to a statement from RRR’s legal department, the closing price of the shares on the NASDAQ Stock Market on November 9, 2021, the last full trading day before the commencement of the tender offer, was $48.99 per share. The tender offer is scheduled to expire at midnight, at the end of the day, New York City time, on December 9, 2021, unless the offer is extended or terminated.
Promptly after the expiration date, RRR said it will, on the terms and subject to the conditions described in the offer to purchase, determine the single per-share purchase price that RRR will pay, subject to conditional tender provisions.
RRR expressly reserved the right, in its sole discretion, to change the per share purchase price range and to increase or decrease the number of shares sought in the tender offer, subject to applicable law.
In addition, in the event that shares are properly tendered at or below the purchase price (and not properly withdrawn) having an aggregate purchase price of more than $350,000,000, RRR may exercise its right to purchase up to an additional 2% of its outstanding shares without extending the expiration date.
Board issues special dividend
The company’s board of directors on Wednesday declared a special cash dividend of $3.00 per share. The special dividend is payable to shareholders of record on November 23, 2021, and is expected to be paid on December 22, 2021.
RRR said shareholders will be entitled to the special dividend whether or not they tender their shares pursuant to the tender offer provided they hold such shares on the record date. However, shareholders that acquire any shares after the record date for the special dividend and subsequently tender such shares pursuant to the tender offer will not receive the special dividend with respect to such shares.
“The company believes the repurchase of shares pursuant to the tender offer, as well as the special dividend, is a prudent use of its financial resources that will allow the company to return value to its shareholders and that a prompt deployment of its investable cash for this purpose is in the best interests of its shareholders,” Red Rock Resorts said in a statement.
Company officials added the tender offer provides a mechanism for completing the company’s sizeable repurchase of shares more rapidly than would be possible through open market repurchases.
The company said it also believes the modified Dutch auction tender offer is an efficient method of providing its shareholders an opportunity to generate value with respect to some or all of their investment in the company by tendering all or a portion of their shares, if they so choose.
The tender offer is not contingent upon a minimum number of shares being tendered or a financing condition; however, the tender offer is subject to a number of other terms and conditions, which are described in detail in the offer to purchase. Specific instructions and a complete explanation of the terms and conditions of the tender offer are contained in the offer to purchase, the related letter of transmittal and other related materials, which are being mailed to shareholders of record.
None of the company, the members of its board of directors, the dealer manager, the information agent or the depositary makes any recommendation as to whether any shareholder should participate or refrain from participating in the tender offer or as to the purchase price or purchase prices at which shareholders may choose to tender their shares in the tender offer.
The information agent for the tender offer is D.F. King & Co., Inc. The depositary for the tender offer is American Stock Transfer & Trust Company, LLC. The dealer manager for the tender offer is BofA Securities, Inc.
Red Rock Resorts, Inc., is a holding company that owns an indirect equity interest in and manages Station Casinos LLC, a provider of gaming and entertainment to the residents of Las Vegas, Nevada. Station LLC's properties, which are located throughout the Las Vegas valley, are regional entertainment destinations and include various amenities, including restaurants, entertainment venues, movie theaters, bowling and convention/banquet space, as well as traditional casino gaming offerings such as video poker, slot machines, table games, bingo and race and sports wagering.
