Griffin and Trump Reach Agreement On Resorts International
ATLANTIC CITY, N.J. (AP) _ Entertainer Merv Griffin will buy Resorts International Inc. under an agreement announced Thursday with developer Donald Trump, ending a much- publicized takeover battle for the casino and real estate company.
Trump said the ″agreement in principle″ will allow him to retain the massive Taj Mahal casino project, which he says he expects to open on the Boardwalk ″within a year.″
Griffin, who was in New Jersey Thursday to meet with state gaming regulators, said he and Trump came to the agreement after a day-long meeting in New York on Wednesday.
Holders of Class A stock, other than Trump, will receive $36 a share under the plan, giving that part of the deal an indicated value of about $206 million.
Trump, who paid $135 a share for his shares of Class B stock, also is getting paid in cash for those shares, said Jack Nusbaum, the developer’s attorney. But he would not provide details of the payment to Trump.
Trump would only say that he will receive ″a substantial profit″ on his shares of Resorts’ Class B stock, which has 100 times the voting power of the Class A stock.
″I am very happy with the transaction and I’m especially happy to have Merv and his entire organization coming to Atlantic City,″ Trump said. ″Resorts will be a great success under his leadership.″
Griffin said his negotiations with Trump were ″like a great tennis game.″
For 23 years, Griffin served as host of the popular ″Merv Griffin Show,″ one of television’s longest-running series, winning 10 Emmy Awards. He has parlayed his entertainment fortune into a business empire that includes radio stations, a major closed-circuit television operation widely used at racetracks and extensive real estate holdings in California.
″Now I want to own hotels,″ Griffin said Thursday.
Under the agreement, Griffin would control the existing Resorts International Hotel Casino in Atlantic City and all Paradise Island operations in the Bahamas.
Harold Vogel, a gambling industry analyst with Merrill Lynch in New York, speculated that the Class B price is hefty.
″Mr. Trump wouldn’t make a deal if it wasn’t good for him,″ he said.
Trump controls Resorts by owning 95 percent of the company’s outstanding Class B shares, and had tried since February to take the company private, offering $22 for each of the company’s 5.7 million outstanding shares of Class A stock.
Trump controls 88 percent of the casino hotel operator’s voting power. In recent weeks, he has repeatedly spurned Griffin’s tender offers to purchase a majority of Resorts’ stock.
As part of the agreement with Griffin, Trump says he will buy the 1,250- room Taj Mahal from Resorts for an undisclosed price. The gaming hall, with an estimated completion cost of $938.5 million, is under construction next door to the Resorts’ existing Boardwalk casino.
Nusbaum said the next step will be to formalize the deal on paper, a process that could take several months. He was not certain whether Resorts’ stockholders would have any say in the agreement, ″but I’m sure they won’t be unhappy with $36 a share.″
William Klein, a New York attorney representing the owners of about 800,000 shares of Class A stock, said he doubts his clients will be unhappy with the tentative agreement.
″It’s nearly double Trump’s offer - it’s a lot better than $22 a share,″ he said. ″I think this is an extraordinary solution of a very difficult problem because of the personalities involved and the complexities of the deal.″
Griffin had offered as much as $46 a share for the Class A and Class B stock, but his offer was contingent upon Trump agreeing to sell his Class B stock and drop a lucrative 10-year comprehensive services agreement with the company.
Griffin met with members of the state Casino Control Commission and the Division of Gaming Enforcement on Thursday and said he exchanged ″a lot of pleasantries.″
He said he did not file an application for a New Jersey casino license on Thursday, adding that it would take time to complete the massive form.
″I will rewrite the book I wrote four years ago and submit it as my application,″ he said jokingly, referring to his autobiography titled ″Merv.″
In the past several weeks, Trump and Griffin have been at war over the entertainer’s bid. Trump initially called Griffin’s offer ″the most preposterous proposal I’ve ever seen.″
Trump filed a $250 million suit against Griffin, claiming fraud, stock market manipulation and interference with Trump’s contractual arrangements with Resorts.
Griffin countered with a $500 million lawsuit against Trump and the rest of Resorts’ directors, accusing them of breach of fiduciary duty.