Colorado's VCG Holding Corp. said Monday it has sold its Jaguar's Gold Club in Fort Worth, Texas, to a unit of Rick's Cabaret International Inc., another men's-club operator that was to acquire VCG in a busted deal.
The sale to the Rick's subsidiary -- RCI Entertainment (Fort Worth) Inc. -- is for $1 million in cash and 467,497 shares of VCG common stock that Houston-based Rick's (NASDAQ: RICK) had purchased on the open market over the past year, said to Allan Priaulx, a spokesman for Rick's.
Shares of VCG closed July 16 at $1.70, putting the value of the shares at $794,744.
VCG said it will use the cash proceeds to pay down debt and will retire the shares included in the sale.
"The sale of Jaguar's Gold Club [in Fort Worth] will allow us to focus our resources on our other national locations, including our Jaguar's Dallas venue," Troy Lowrie, chairman and CEO of Lakewood-based CVG (NASDAQ: VCGH), said in a statement.
He said the company doesn't expect an impact on earnings from the sale, "especially when considering the interest savings we expect to realize following the $1 million reduction in our high interest debt.â€
VCG now owns 19 adult nightclubs nationwide, including Denver's Diamond Cabaret, La Boheme, Penthouse Club and two PT's clubs here.
A $45 million deal under which Rick's was to acquire VCG fell through April 1, with Rick's saying it was not able to enter into a definitive merger agreement to acquire all of VCG's outstanding stock.
The transaction would have created the largest publicly traded operator of men's clubs in North America.
In the Fort Worth club sale, Rick's acquired a long-term lease of the club site and an option to buy the property at a price to be determined.
Priaulx said that the club will be rebranded, but a decision on the new name has yet to be made.
The acquisition of Jaguar's Gold gives Rick's seven clubs in the Dallas-Fort Worth market.
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last commentSize is important. Penthouse Clubs want to become the national chain, dominant in all major markets.
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Just checked on MSN Money again yesterday, Sam, and Eric Langan still hasn't sold any stock. My only thought as to why he hasn't is the stock options were backdated to the recent lows in the stock price and selling such a large amount would draw the attention of the SEC. There was an option backdating scandal at many of the major Silicon Valey Tech firms a few years ago and the SEC took them to task then. Otherwise, for Langan not to capitalize on a 615% gain (from $2.52 to $15.50) may be the worst financial management ever.
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CT I guess he is not a ROB like the dancers at his club
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"VCG now owns 19 adult nightclubs nationwide, including Denver’s Diamond Cabaret"
Well, that partly explains why this stock has sucked as of late. That Denver strip club was notorious as an overpriced train wreck. VCGH is up a tad in the past month though.
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I have read in Denver there are more bars per capita than any other city also the healthiest city. That means lots of drunk girls and no fatties.
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