Dissident shareholders in Europa Cruises have begun an effort to oust CEO Deborah Vitale and replace her with Jim Rafferty, a former Harrah’s Entertainment Inc. (HET) executive.
The dissidents don’t like Vitale’s plans to eliminate its "cruise to nowhere" gaming operations in favor of building and operating a gaming resort and hotel in Mississippi. Vitale has already sold off the gaming ships and is focusing on developing a 400-acre parcel in Diamondhead, Miss.
Vitale’s vision is for a large "destination" resort with 3,500 hotel rooms, restaurants, retail facilities, a golf course and a convention center. Total cost of the development would be about $500 million.
Writing to other shareholders, the dissidents say the company cannot support such a massive project, especially when the clientele is expected to be daytrippers from a 50-mile radius.
Working with Rafferty, the group has suggested a more modest development involving a 400-room hotel, two restaurants and a 40,000 square foot casino.
Europa Cruises (KRUZ) has a market capitalization of about $26 million. Shares closed Monday at 92 cents each, an increase of two cents on the exchange of 11,000 shares.