Investment group changes its mind on Jackpot, supports deals

John Wilen

Tuesday, March 23, 1999 | 10:45 a.m.

One of Jackpot Enterprises Inc.'s dissident shareholders has come in from the cold.

Kenneth W. Pavia Sr., general partner of Miami-based Bolero Investment Group LP, says he will vote for the Jackpot acquisitions of CRC Holdings Inc. and Players International Inc. Pavia also said he will withdraw a proposal filed with the Securities and Exchange Commission last year calling for Jackpot to "take all necessary steps to achieve a sale, merger or other business combination involving the company."

Pavia controls 5.4 percent of Jackpot. He has been critical of the Las Vegas company's management, and in the past has refused to endorse the company's acquisitions of CRC and Players until he saw more detailed financial information.

Pavia announced an about-face today.

"Mr. Pavia stated that after a thorough review of the two transactions and reasonable and prudent financial assumptions, it was Bolero's opinion that the combined entities would provide the shareholders of Jackpot the relief they have been seeking," says a Bolero statement.

Jackpot is acquiring CRC, a Miami-based company that operates as Carnival Resorts & Casinos, for $56 million in stock and debt. CRC owns part of a Louisiana riverboat casino, operates an Indian casino near Toronto, is developing an Indian casino near Spokane, Wash., and is negotiating a deal to develop a casino at Lake Las Vegas.

Jackpot is also acquiring Players, an Atlantic City-based operator of riverboat casinos in the south and midwest, for $424 million in stock, cash and debt.

Noting that the two acquisitions will boost Jackpot's annual revenues to $500 million, and cash flows to $100 million, Pavia said: "The integrated, synergistic entities will have the potential to to significantly enhance revenues and earnings of Jackpot."

Pavia said the combined companies will have an attractive balance sheet that will allow "significant growth opportunities. ... As such the board and management should be commended for their bold acquisitions and their commitment to provide maximum shareholder value."

Another dissident shareholder, Bob Nichols of Los Angeles, has said he will vote against the mergers. Nichols controls 1.4 percent of Jackpot.