LV gaming supplier in merger talks again

Wednesday, Aug. 29, 2001 | 11:20 a.m.

Paul-Son Gaming Corp., a Las Vegas-based supplier of gaming equipment, said Monday it has resumed merger talks with French gaming supplier Etablissments Bourgogne et Grasset, the parent company of Bud Jones Co. Inc. of Las Vegas.

The companies had signed a letter of intent in February that would have given B&G shareholders majority control of the merged company. But a definitive agreement could not be reached by April 30, and Paul-Son demanded a $1 million termination fee from B&G. B&G responded by making "unspecified claims" against Paul-Son, Paul-Son said. The two sides then entered into arbitration.

Since then, the two sides have stayed their arbitration talks and have resumed merger discussions, Paul-Son said. Both sides are reserving rights to resume their claims if a definitive agreement can't be reached. Paul-Son said it will not comment further on the deal until either an agreement is reached or negotiations are terminated.

Separately, the company reported net income of $56,000, or 2 cents per share, for the quarter ending May 31. In the year-ago period, the company reported a net loss of $179,000, or 5 cents per share. Sales were up just 1 percent during the period, to $5.12 million.

Sales were kept flat by a lack of new casino openings and strength in the Mexican peso, which impacted the operations of Paul-Son's Mexican manufacturing operations. Still, the company was able to report a profitable quarter due to reductions in manufacturing, selling, general and administrative expenses.

Paul-Son is currently trying to sell its 60,000-square-foot headquarters building on Industrial Road, which it purchased in 1995 for $2 million. The company said the building was put up for sale following the shift of all manufacturing operations to San Luis, Mexico in 1998.