Jeffrey P. Jacobs, Chairman and CEO of Jacobs Investments has withdrawn his proposal of merger between his company and MTR Gaming Group, Inc. (NASDAQ:MNTG), a filing with the Securities and Exchange Commission revealed. Instead of that, Jacobs signed a Support Agreement with Eldorado Resorts. The agreement was accepted in exchange for Eldorado raising its proposal to acquire MTR for $6.05 per share, instead of $5.15 offered previously. Eldorado also agreed to increase the cash portion, that will be paid to MTR stockholders in the merger process, to $35 million, from $30 million.
In this way, Jacobs, who holds around 5.1 million shares of the company (which represent over 18% of the company), has agreed to vote in favor of the merger between Eldorado and MTR. Jacobs has been negotiating the merger with MTR Gaming, for some time before giving up. At the beginning of October, Jeffrey Jacobs offered to sell Jacobs Entertainment to MTR, stating that it will provide more value for MTR shareholders, in comparison with the merger proposal issued at that time by Eldorado. Later Jacobs urged the board again to support his proposition, claiming that shareholders of MTR will receive $30 million from the deal he offeres, instead of just below $25 million from the merger with Eldorado.
The board of MTR entered into an agreement and plan of merger with Eldorado in September.