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LOOK HELL JUST FROZE OVER!!! Ricks and VCG Holdings are Merging!!!
http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=PZ&date=20100216&id=1112 3636
Rick's Cabaret International, Inc. and VCG Holding Corp. Enter Into Letter of Intent to Merge to Form the Largest Publicly Traded North American Gentlemen's Club Operator
February 16, 2010 4:50 PM ET
HOUSTON and DENVER, Feb. 16, 2010 (GLOBE NEWS) -- Rick's Cabaret International, Inc. (Nasdaq:RICK), VCG Holding Corp. (Nasdaq:VCGH) and Troy Lowrie and his affiliates have signed a letter of intent under which Rick's Cabaret will acquire all of the outstanding shares of VCG Holding to form the largest publicly traded operator of upscale gentlemen's clubs in North America, the two companies announced today.
Rick's Cabaret currently operates 18 nightclubs in seven states while VCG Holding operates 20 clubs in ten states. The two companies had combined revenues of $131.3 million for the 12 month period ending September 30, 2009.
Eric Langan, President and CEO of Rick's Cabaret International, said: "The combination of these two companies will result in a powerful operator that we believe would have generated earnings before income tax and depreciation (EBITDA) for the 12 months ended September 30, 2009 of approximately $25.3 million without any of the add-backs we anticipate we will achieve through synergistic cost savings. I am confident that the combined entities can achieve meaningful savings through streamlined management and elimination of duplicate costs associated with being two separate public companies, including lower legal and accounting expenses."
Troy Lowrie, Chairman and Chief Executive Officer of VCG Holding Corp., said: "We at VCG are very pleased that this merger will create the leading adult entertainment nightclub operator in the United States. There are significant similarities in the companies' cultures and capabilities, and this should ultimately be a great combination for our shareholders, customers, and employees. We believe that the combined company will be better positioned to generate strong financial results and capitalize on future growth opportunities."
Rick's Cabaret International currently operates clubs under the Rick's Cabaret brand in New York City, Las Vegas, Houston, Ft. Worth, Austin, Minneapolis and San Antonio; under the Tootsie's Cabaret brand in Miami; under the XTC Cabaret brand in Austin, Dallas, Houston (two clubs) and San Antonio; under the Club Onyx brand in Houston, Charlotte, Dallas and Philadelphia; and under Cabaret North in Ft. Worth. A Rick's Cabaret in Austin that had been closed temporarily is scheduled to re-open under a new concept next month.
VCG Holding operates Imperial Showgirls in Anaheim; Diamond Cabaret, La Boheme, The Penthouse Club, PT's Showclub, PT's All Nude, all in Denver; PT's Showclub in Colorado Springs, Portland Maine, Louisville and Miami; The Men's Club in Raleigh; PT's Brooklyn, PT's Centreville, PT's Sports, The Penthouse Club and Roxy's, all in East St. Louis, Illinois; Jaguars in Dallas; Jaguars in Ft. Worth; PT's Showclub in Indianapolis; and Schieks Palace Royale in Minneapolis.
"The addition of the PT's Showclub brand and the opportunity to re-brand certain VCG Holding properties as Rick's Cabaret will be a great enhancement to our portfolio," Mr. Langan said. "Troy Lowrie has built a terrific organization that we expect will fit nicely with ours, giving us new strength in the Midwest and Western states in particular and added market strength in key areas where we both now operate competitively. We are pleased that Troy has agreed to stay on as a consultant."
Under the non-binding (except as to certain provisions, including exclusivity and confidentiality) letter of intent, the companies anticipate a potential merger (structured to qualify as a tax-free reorganization), in which VCG Holding's shareholders will receive shares of Rick's common stock based on certain exchange ratios valuing each share of VCG Holding's common stock between $2.20 and $3.80 per share, determined based on the weighted average closing price of Rick's common stock as traded on the Nasdaq Global Market for the 20 consecutive trading days ending on the second trading day prior to the closing of the Merger. As of February 16, 2010 (and assuming the potential merger were to close on such date and that the weighted average closing price per share of Rick's common stock for the 20 consecutive trading days ending on February 11, 2010 was equal to the closing price of Rick's common stock on February 11, 2010 of $11.76 per share), the value of each share of VCG Holding's common stock under this formula would be $2.66 per share. In the event the price per share of Rick's common stock as determined by this formula is below $8.00, Rick's may terminate the merger agreement, subject to the payment to VCG Holding of a termination fee to be negotiated by the parties in connection with the preparation of the merger agreement.
Contemporaneously with the merger, Rick's will acquire 5,770,197 shares of VCG Holding common stock held by Troy Lowrie and his affiliates, for cash in an amount equal to the lesser of $2.44 per share or the per share price of common stock received by VCG Holding's shareholders in the proposed merger. Mr. Lowrie may elect to receive shares of Rick's common stock at the same exchange rate received by VCG Holding's shareholders, for up to 30% of his VCG Holding common stock. In addition, in exchange for additional payments to be made to Mr. Lowrie as detailed in the letter of intent, Mr. Lowrie will refinance (at a lower interest rate) and continue to carry a $5.7 million note from VCG Holding (as acquired by Rick's), continue to personally guarantee certain VCG Holding's obligations in exchange for a fair market value cash payment for such guarantees, sell to Rick's the outstanding capital stock of Club Licensing, Inc., a subsidiary of Lowrie Management, LLLP, sell to Rick's the trademarks "Diamond Cabaret" and "PT's," and enter into a three-year consulting agreement with Rick's.
The Letter of Intent also provides for an exclusivity period through March 12, 2010, during which time VCG Holding and its representatives agree to negotiate exclusively with Rick's, subject to termination and a termination fee payable to Rick's upon VCG Holding's receipt of a "superior proposal" to acquire 20% or more of VCG Holding, by way of a sale of assets, tender offer, merger, consolidation or other business combination, that in the opinion of VCG Holding's financial advisor, is, or is reasonably likely to lead to, a proposal that is more favorable to the shareholders of VCG Holding than the proposed merger. If definitive merger documents are not entered into as of such date, the letter of intent will terminate, unless otherwise extended by the parties. Under the letter of intent, the merger agreement is expected to contain customary representations and warranties including the absence of a material adverse change of Rick's and VCG Holding and other customary closing conditions, including but not limited to, the receipt of material consents, the approval of the merger by the shareholders of Rick's and of VCG Holding, and the effectiveness of a registration statement containing a joint proxy statement/prospectus filed with the Securities and Exchange Commission (the "SEC") on Form S-4 to be filed by Rick's, which, among other things, registers the shares of Rick's common stock to be issued to VCG Holding's shareholders in the merger. There can be no assurance that Rick's and VCG Holding will enter into any definitive transaction agreement, that the entry into a transaction agreement, if any, will result in the closing of any specific transactions, or that the terms of any definitive transaction documents will reflect the terms of the proposed merger as outlined in the letter of intent. A copy of the Letter of Intent has been filed on Form 8-K filed by both companies today with the Securities and Exchange Commission (the "SEC"). The definitive merger agreement, if consummated, will include final terms and conditions of the proposed transaction negotiated by the parties, and will be disclosed upon execution.
Additional Information and Where to Find It
In connection with the proposed merger, Rick's Cabaret International, Inc. ("Ricks") and VCG Holding Corp. ("VCG Holding") intend to file documents relating to the transaction with the SEC, including a registration statement containing a joint proxy statement/prospectus on Form S-4 to be filed by Rick's. Investors are urged to read the joint proxy statement/prospectus regarding the proposed merger, if and when it becomes available, because it will contain important information. When it becomes available, shareholders and other investors will be able to obtain a free copy of the joint proxy statement/prospectus, and are able to obtain free copies of other filings and furnished materials containing information about Rick's and VCG Holding at the SEC's internet website at www.sec.gov. Copies of the joint proxy statement/prospectus, when it becomes available, and any SEC filings incorporated by reference in the joint proxy statement/prospectus can also be obtained, without charge, by directing a request to Rick's Cabaret International, Inc., 10959 Cutten Road, Houston, Texas, 77066, telephone (281) 397-6730, Attention: Phil Marshall, or to VCG Holding Corp., 390 Union Boulevard, Suite 540, Lakewood, Colorado 80228, telephone (303) 934-2424, Attention: Courtney Cowgill.
Interests of Participants in the Solicitation of Proxies
Each of the Rick's and VCG Holding and their respective directors and executive officers may be deemed to be "participants" in the solicitation of proxies in respect of the proposed transaction under SEC rules. Information regarding Rick's directors and executive officers is available in its definitive proxy statement on Schedule 14A filed with the SEC on July 7, 2009 and in its annual report on Form 10-K filed with the SEC on December 17, 2009 and information regarding VCG Holding's directors and executive officers is available in its definitive proxy statement on Schedule 14A filed with the SEC on April 30, 2009. Copies of these documents can be obtained, without charge, at the SEC's internet website at www.sec.gov or by directing a request to the Rick's or VCG Holding, as applicable, at the addresses above. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.
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Re: LOOK HELL JUST FROZE OVER!!! Ricks and VCG Holdings are Merging!!!
Hmmm since VCG operates some clubs under the Jaguar's name, does that mean Rick's in Vegas is going back to the Jaguar name? ::)
It's been a Rick's for 2-3 yrs now and I think it's time to change the name again. :-X
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Re: LOOK HELL JUST FROZE OVER!!! Ricks and VCG Holdings are Merging!!!
WOW... just WOW! If I had extra money to throw around I think I'd be buying some VCGH stocks tomorrow morning.
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Re: LOOK HELL JUST FROZE OVER!!! Ricks and VCG Holdings are Merging!!!
Quote:
Originally Posted by
CalifSCVisitor65
Hmmm since VCG operates some clubs under the Jaguar's name, does that mean Rick's in Vegas is going back to the Jaguar name? ::)
It's been a Rick's for 2-3 yrs now and I think it's time to change the name again. :-X
WTF? Try a year, maybe 18 months.
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Re: LOOK HELL JUST FROZE OVER!!! Ricks and VCG Holdings are Merging!!!
RICKS I think will leave it as RICKs in Vegas. Same goes for NYC.
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Re: LOOK HELL JUST FROZE OVER!!! Ricks and VCG Holdings are Merging!!!
Quote:
Originally Posted by
mediocrity
WTF? Try a year, maybe 18 months.
Really seems like it's been longer than 12-18 mths. :O/:O:-\
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Re: LOOK HELL JUST FROZE OVER!!! Ricks and VCG Holdings are Merging!!!
Quote:
Originally Posted by
CalifSCVisitor65
Really seems like it's been longer than 12-18 mths. :O/:O:-\
Yup. I moved out of LV five months ago and it changed names only about 6-8 months-ish before that.
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Re: LOOK HELL JUST FROZE OVER!!! Ricks and VCG Holdings are Merging!!!
This shit scares me. Im worried in 5 yrs every club is going to belong to some sort of gentlemen's club super company of Ricks/VCG and deja screw that buys out pretty much every single independent club and then starts taking like 90% of our earnings :(.
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Re: LOOK HELL JUST FROZE OVER!!! Ricks and VCG Holdings are Merging!!!
^^^ Don't worry... there's always young twenty somethings coming on here thinking they are going to start a strip club. Some of them do and most fail miserably. Anyhow, there's always people trying to start new clubs. It's just that in many places getting a business license and liquor license for the sort of thing is hard. However, the big companies can't make a monopoly or they'd get sued big time. You know how it goes... the government doesn't like competition.
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Re: LOOK HELL JUST FROZE OVER!!! Ricks and VCG Holdings are Merging!!!
VCG is now under investigation.
Bernstein Liebhard LLP Announces Investigation of VCG Holding Corporation Merger
Posted on : 2010-02-18 | Author : Bernstein Liebhard LLP
News Category : PressRelease
NEW YORK - (Business Wire) Bernstein Liebhard LLP is investigating whether the board of directors of VCG Holding Corporation (“VCG”) (NASDAQ: VCGH) breached its fiduciary duty to its shareholders in agreeing to sell VCG to Rick’s Cabaret International, Inc. (“Rick’s”).
Under the letter of intent for Rick’s to acquire VCG, VCG’s shareholders will receive shares of common stock of Rick’s in exchange for their shares of VCG’s common stock based on an exchange ratio that values each VCG share between $2.20 and $3.80 per share.
However, the principal shareholder in VCG and its affiliates will be receiving other forms of consideration.
If you are interested in discussing your rights as a VCG shareholder and/or have information relating to the matter, please contact U. Seth Ottensoser at (877) 779-1414 or [email protected].
Bernstein Liebhard has pursued hundreds of securities, shareholder rights, and consumer cases and recovered approximately $2 billion for its clients. It has been named to The National Law Journal’s “Plaintiffs’ Hot List” in each of the last seven years.
ATTORNEY ADVERTISING. © 2010 Bernstein Liebhard LLP. The law firm responsible for this advertisement is Bernstein Liebhard LLP, 10 East 40th Street, New York, New York 10016, (212) 779-1414. Prior results do not guarantee or predict a similar outcome with respect to any future matter.
Bernstein Liebhard LLP
U. Seth Ottensoser, 877-779-1414
[email protected]
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Re: LOOK HELL JUST FROZE OVER!!! Ricks and VCG Holdings are Merging!!!
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Re: LOOK HELL JUST FROZE OVER!!! Ricks and VCG Holdings are Merging!!!
boo. I thought this thread was going to be about the saints winning the super bowl.
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Re: LOOK HELL JUST FROZE OVER!!! Ricks and VCG Holdings are Merging!!!
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Re: LOOK HELL JUST FROZE OVER!!! Ricks and VCG Holdings are Merging!!!
Quote:
Originally Posted by
Kylea2
^^^ Don't worry... there's always young twenty somethings coming on here thinking they are going to start a strip club. Some of them do and most fail miserably. Anyhow, there's always people trying to start new clubs. It's just that in many places getting a business license and liquor license for the sort of thing is hard. However, the big companies can't make a monopoly or they'd get sued big time. You know how it goes... the government doesn't like competition.
I don't know, Kylea..there are a lot of corporations (well, banks, but some other kinds of corps now) that are 'too big to fail'; and keep getting bigger. The law against monopolies is,if still on the books at all, not enforced in any meaningful way. These days it seems that it doesn't matter how big a corporation is. The new SCOTUS decision allowing corps to basically outright buy themselves a politician is another incentive for some gentleman's clubs groups to conglomerate. I think this kind of thing will become more common instead of less. But to address Athena's worry about these large corps trying to get a big percentage of our earnings; here is where the plethora of lawsuits against different clubs (the employee designation vs. independant contractor issue) will possibly become a consideration. All in all, these are interesting developments and bear watching. Personally, I think these guys are going to end up painting themselves into a corner in several ways..but we'll see.
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Re: LOOK HELL JUST FROZE OVER!!! Ricks and VCG Holdings are Merging!!!
In what ways do you think they'll paint themselves into a corner, lildreamer? I want to get ahead of this trend and know if I should bet on them and park some money there or if I should stay away! /:O
Isisstar, is this the chain you said has a shitton of rules the girls have to follow?
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Re: LOOK HELL JUST FROZE OVER!!! Ricks and VCG Holdings are Merging!!!
Yes^ and they're very comparable to Deja Vu when it comes to exploiting dancers for their own financial gains. Expect to give away 30-50% of your earnings at the end of the night.... and work your fucking ass off harder than any independent club ever made you work.
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Re: LOOK HELL JUST FROZE OVER!!! Ricks and VCG Holdings are Merging!!!
In this instance, Ricks/VCG 40 plus clubs out of 2500 plus clubs in the USA could not be considered a monopoly.
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Re: LOOK HELL JUST FROZE OVER!!! Ricks and VCG Holdings are Merging!!!
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Re: LOOK HELL JUST FROZE OVER!!! Ricks and VCG Holdings are Merging!!!
^^ Las Vegas and Austin you can, in my experience.
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Re: LOOK HELL JUST FROZE OVER!!! Ricks and VCG Holdings are Merging!!!
Quote:
Originally Posted by
mediocrity
^^ Las Vegas and Austin you can, in my experience.
kickass! because i am finishing up with my packing and getting ready to make the overnight drive to austin as i type this! I love being able to do whatever i want in regards to scheduling.
now if only austin was a 24 hr city. that is one of many things i am going to miss about new orleans-- being able to go to a bar at 5 or 6 am if i feel like it. i am probably not going to be able to stay away from this city for long. but ill give austin a fair shot :).
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Re: LOOK HELL JUST FROZE OVER!!! Ricks and VCG Holdings are Merging!!!
Quote:
Originally Posted by
lildreamer316
I don't know, Kylea..there are a lot of corporations (well, banks, but some other kinds of corps now) that are 'too big to fail'; and keep getting bigger. The law against monopolies is,if still on the books at all, not enforced in any meaningful way. These days it seems that it doesn't matter how big a corporation is. The new SCOTUS decision allowing corps to basically outright buy themselves a politician is another incentive for some gentleman's clubs groups to conglomerate. I think this kind of thing will become more common instead of less. But to address Athena's worry about these large corps trying to get a big percentage of our earnings; here is where the plethora of lawsuits against different clubs (the employee designation vs. independant contractor issue) will possibly become a consideration. All in all, these are interesting developments and bear watching. Personally, I think these guys are going to end up painting themselves into a corner in several ways..but we'll see.
I'd say the government still takes the problem of monopolies into consideration. For example, many little cities have seen how Wal-mart puts mom and pop shops out of business and has managed to create laws or take into consideration the protesting of citizens enough that they won't allow new Wal-marts to be built in the small town.