Yuanxi Zhang
Long/short equity, value, special situations

MTR Gaming: Shareholders Are Likely To Receive Superior Merger Proposal

Recommendation: Long MTR Gaming Group (MNTG) at $5.20

Thesis

With two unsolicited acquisition offers topping the initial Eldorado Offer, shareholders are likely to see either a bump in the original Eldorado offer price and/or a change of recommendation to one of the two higher offers currently on the table. In either case, shareholders will probably receive a significantly better merger consideration. With the board meeting and a decision drawing near, shareholders may see a 4.8% gross return in the next 2 - 4 weeks. In order for shareholders to realize a 1.0% loss, the board would have to find a strong excuse to disregard the seemingly superior alternative offers.

Background of the Merger

As part of the consolidation trend...

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