RICHMOND, Va. - The owner of the Colonial Downs thoroughbred track in Virginia wants to sell his company to West Virginia-based MTR Gaming Group Inc. in exchange for $144.5 million in MTR stock.
Chief executive Jeffrey Jacobs made the unsolicited offer to sell Colorado-based Jacobs Entertainment Inc. in a letter arguing the deal would help MTR diversify, the Richmond Times-Dispatch reported Tuesday.
MTR owns Presque Isle Downs & Casino near Erie, Pa., and Mountaineer Casino and Racetrack & Resort in Chester. Last summer, it also began operating nearly 1,800 gambling machines at Scioto Downs Casino & Racetrack, a harness racing track near Columbus, Ohio.
Jacobs Entertainment runs casinos in Colorado and Nevada, and has other gambling interests in Virginia and Louisiana. Regulatory filings show it also currently holds about 18 percent of MTR's stock.
Jacobs also notes his company has maintained strong financial performance through difficult economic times.
MTR Chief Financial Officer John Bittner didn't immediately comment on the proposal Tuesday.
Jacobs contends MTR must diversify geographically and expand its holdings, and Jacobs Entertainment provides the "additional scale necessary to survive and compete."
Jacobs Entertainment also owns 10 off-track betting facilities in Virginia; The Lodge Casino at Black Hawk and the Gilpin Hotel Casino, both in Colorado; the Gold Dust West-Reno, the Gold Dust West-Carson City and the Gold Dust West-Elko in Nevada; and 23 video poker truck stops in Louisiana.
Jacobs said the company anticipates a profit of $61.5 million this year.
Last month, MTR announced President and CEO Jeffrey Dahl will leave the gambling company to pursue other business opportunities. In March, the company reported a fourth-quarter loss of nearly $5.5 million, or 20 cents per share, on net revenues of $116.3 million.
That's compared with loss of $6 million, or 21 cents per share, for the same period in 2011. Revenues, however, were up about 12 percent from year to year.