Rick's Cabaret deal to buy strip-club company VCG Holdings is off
samsung1
Ohio
Rick's Cabaret International Inc.'s $45 million deal to acquire competitor VCG Holding Corp. of Colorado, merging two of the nation's largest adult-nightclub operators, fell through Thursday.
VCG's shares dropped nearly 16 percent Thursday following the announcement, closing at $2.02.
Houston-based Rick's issued a statement early Thursday that it was not able to enter into a definitive merger agreement to acquire all of VCG's outstanding stock.
The companies' letter of intent had been extended to Wednesday, but expired, Rick's said in a statement, without providing further specifics.
The transaction, originally announced on Feb. 16, would have created the largest publicly traded operator of gentlemen's clubs in North America.
As recently as March 11, the two companies said they were "committed to work toward execution of definitive documents as expeditiously as possible."
Lakewood-based VCG (NASDAQ: VCGH) operates Denver's Diamond Cabaret, La Boheme, Penthouse Club and two PT's clubs out of about 20 clubs nationwide.
Rick's Cabaret (NASDAQ: RICK) runs 18 nightclubs in seven states, including Rick's Cabarets in New York City, Las Vegas, Houston, Fort Worth, Austin, Minneapolis and San Antonio; five CTX Cabaret clubs in Texas; and Club Onyx locations in Houston, Charlotte, Dallas and Philadelphia.
The two companies reported combined revenues of $131.3 million for the 12 months ending Sept. 30, 2009.
As part of the deal, Troy Lowrie, VCG's chairman, CEO and largest single stockholder, would have stayed on as a consultant to Rick's Cabaret for three years.
Last November, Lowrie said he wanted to buy up all outstanding VCG stock for $2.10 a share, through an investment entity called Lowrie Management LLLP and “certain other unidentified investors,†and take the company private. But in December, a special VCG board committee evaluating Lowrie's offer deemed it “currently inadequate.â€
http://www.bizjournals.com/denver/storie…
I don't think this is an april fool's joke by the way.
VCG's shares dropped nearly 16 percent Thursday following the announcement, closing at $2.02.
Houston-based Rick's issued a statement early Thursday that it was not able to enter into a definitive merger agreement to acquire all of VCG's outstanding stock.
The companies' letter of intent had been extended to Wednesday, but expired, Rick's said in a statement, without providing further specifics.
The transaction, originally announced on Feb. 16, would have created the largest publicly traded operator of gentlemen's clubs in North America.
As recently as March 11, the two companies said they were "committed to work toward execution of definitive documents as expeditiously as possible."
Lakewood-based VCG (NASDAQ: VCGH) operates Denver's Diamond Cabaret, La Boheme, Penthouse Club and two PT's clubs out of about 20 clubs nationwide.
Rick's Cabaret (NASDAQ: RICK) runs 18 nightclubs in seven states, including Rick's Cabarets in New York City, Las Vegas, Houston, Fort Worth, Austin, Minneapolis and San Antonio; five CTX Cabaret clubs in Texas; and Club Onyx locations in Houston, Charlotte, Dallas and Philadelphia.
The two companies reported combined revenues of $131.3 million for the 12 months ending Sept. 30, 2009.
As part of the deal, Troy Lowrie, VCG's chairman, CEO and largest single stockholder, would have stayed on as a consultant to Rick's Cabaret for three years.
Last November, Lowrie said he wanted to buy up all outstanding VCG stock for $2.10 a share, through an investment entity called Lowrie Management LLLP and “certain other unidentified investors,†and take the company private. But in December, a special VCG board committee evaluating Lowrie's offer deemed it “currently inadequate.â€
http://www.bizjournals.com/denver/storie…
I don't think this is an april fool's joke by the way.
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7 comments
I have limited experience with Ricks- Houston was good many years ago, lately they seem to be jumping in and out of different clubs with no apparent rhyme or reason. Being too "corporatized" (thing Deja Vu & Spearmint Rhino) doesn't portend good things for customer enjoyment.
does anyone else smell "insider trading"?
http://en.wikipedia.org/wiki/Strip_club
Rick's Cabaret revenue for 2009 was $75 million
http://quote.morningstar.com/stock/s.asp…
75 million out of 5 billion is still less than 2% so I would say Rick's cabaret is far from being a monopoly in the strip club industry. It might seem that way in some Texas areas but here in Ohio they have no clubs.