Mikohn to change name, spin off its interior sign division

Dec 7, 2004 6:48 AM

Mikohn Gaming Corporation (MIKN) is spinning off its interior sign division in order that it might concentrate "solely on technology and content."

When the spin off is completed in late March 2005, the core business will change its name to Progressive Gaming International Corporation and will trade on the NASDAQ under the new ticker symbol, "PGIC."

The company will continue to own a minority stake in the new privately held entity whose executive staff will consist primarily of Mikohn personnel.

James Cook, who serves as Mikohn’s Western Regional vice president of sales, is expected to be the interior sign division president while Margerhita Arvanites, vice president of operations and manufacturing, will be chief executive officer.

Mikohn has hired Roth Capital Partners as financial adviser on the transaction. The company expects the restructuring to result in a non-recurring gain and will provide revised revenue estimates for fiscal 2005 when the transaction is completed.

GTECH venture

GTECH Holdings Corporation (GTK), the world’s leading provider of lottery equipment and services, is expanding its involvement in the gaming equipment industry.

On Monday, the company said it had agreed to purchase a 50% interest in the Atronic Group from the family owned Gauselmann Group The purchase price, expected to be between $100 million and $150 million, will be determined through a performance-based formula equal to eight times Atronic’s EBITDA (earnings before interest, taxes, depreciation and amortization).

Atronic, which has offices both in Las Vegas and Reno, is the second largest manufacturer of gaming devices worldwide, having sold more than 1.9 million machines since its inception.

GTECH said that under this agreement, Atronic would continue to maintain its current operations and its established worldwide identity. "A cooperation and integration plan is already under development in order to assure customers of uninterrupted services and a seamless transition. When appropriate, Atronic will begin collaborating with GTECH in order to maximize opportunities for both companies prior to the Dec. 31, 2006, closing," the company statement said.

Also, GTECH said the Atronic transaction "will strengthen GTECH’ Spielo subsidiary”¦ The two companies are complementary and will ultimately enable each organization to leverage the other’s strengths."

Political infighting

Whether Donald Trump retains the casino license granted to him by the Indiana Gaming Commission could depend on how the incoming governor addresses the situation when he takes office in January.

The Commission rejected two competing bids (including one from home-grown basketball legend Larry Bird) in choosing Trump for a casino in the little town of French Lick.

Since then, critics note, a Gary riverboat, owned and operated by the bankrupt Trump Hotels & Casino Resorts Inc. (DJTCQ) has failed to pay $18 million in back state taxes. Also, they say, the fact that the company is in bankruptcy places into question whether it could come up with the $108 million needed to finance the project.

Commission Executive Director Glenn Lawrence warned the incoming administration that his group has always acted independently without political intervention.

Incoming Gov. Mitch Daniels replied, "I will say that one unelected bureaucrat shouldn’t be making a decision this big, especially when there are some unanswered questions about the solvency of the company."

Ameristar fined

Gaming regulators in Missouri have fined Ameristar Casinos Inc. (ASCA) $200,000 because of a malfunction in some progressive slot machines operating at its casino in St. Charles.

According to the Missouri Gaming Commission, the casino had a malfunction in a component of one of its progressive slot machines. This resulted in the progressive jackpots paying less than what should have been paid.

From August 2002 through March 2004, the commission said, the progressive jackpots underpaid winners by $152,811. A software malfunction caused the jackpots to appear lower than they should have been.

To prevent this from happening, the commission said, the company should have installed a backup system.

THE INSIDER: Pinnacle Entertainment Inc. (PNK) said its directors had approved the proposed purchase of the Embassy Suites Hotel in downtown St. Louis, Mo.

Scientific Games Corporation (SGMS) has proposed a private offering of $200 million of senior subordinated notes.

Cox Enterprises Inc. (CEI) has proposed to take Cox Communications Inc. (COX) private by paying $34.75 per share for the outstanding shares. Cox Communications provides the cable service in Las Vegas.

Edward Garruto has been named general manager of the Caesars Indiana riverboat casino. The facility is owned by Caesars Entertainment Inc. (CZR).

Century Casinos Inc. (CNTY) says it plans to sell its interest in a Gauteng, South Africa, gaming license to its partners. The license has been held up in litigation.

Analysts at Roth Capital have initiated coverage of the stock of Lakes Entertainment Inc. (LACO) with a buy rating.

Nevada Assembly Speaker Richard Perkins has filed a bill to expand the required distance between a casino and schools and churches.

Analysts at Merriman Curhan Ford downgraded the shares of Alliance Gaming Corp. (AGI) on Monday from the previous "buy" rating to "neutral."

As he predicted, Pennsylvania Gov. Ed Rendell has vetoed amendments to the state’s slot machine law.