Thursday, Feb. 1, 2001 | 11:27 a.m.
Paul-Son Gaming Corp. on Wednesday announced it has signed a letter of intent to merge with a French gaming equipment manufacturer -- a deal that would shift control of the long-time Las Vegas company from the Endy family to a French concern.
The deal would result in Paul-Son acquiring French company Bourgogne et Gresset SA and its subsidiary, The Bud Jones Co. Inc. of Las Vegas, in a stock swap. Bourgogne's shareholders would acquire 51 percent of Paul-Son's shares in the transaction, giving it control of the company. A dollar figure for the transaction was not given.
Bourgogne President and Chief Executive Gerard Charlier would assume the role of chairman and chief executive of Paul-Son from Eric Endy, who would become vice chairman. Bourgogne acquired Bud Jones, a 35-year-old company, in October.
The deal is dependent on the signing of a definitive agreement, the approval of Paul-Son shareholders and necessary regulatory approvals. Paul-Son rose 21 percent to $1.97 this morning in light trading.
Paul-Son employs about 60 people in the United States and about 400 in its Mexico manufacturing operation.
"We're business as usual, and we don't anticipate any changes in the operation or services to our customers and our clients at this time or in the near future," Endy said. "In my opinion, this is a beneficial transaction for the shareholders of this company, myself being the largest shareholder."
Endy declined further comment until a definitive agreement could be reached.
Bourgogne will acquire 300,000 shares of stock from the Paul S. Endy Living Trust, which is currently Paul-Son's controlling shareholder. Bourgogne will pay $900,000 for the shares, and will ultimately control 56 percent of Paul-Son's stock as a result.
Combined, the companies should become a leader in the global casino equipment manufacturing market, officials said, combining Paul-Son's leading position in the United States with Bourgogne's position in the European and Far Eastern casino equipment supply markets.
Paul-Son, founded in 1963 by Paul Endy, is one of the casino industry's largest providers of table game equipment, including casino chips, cards, dice, furniture and accessories. It has offices in Las Vegas and Atlantic City, and a manufacturing facility in Mexico. Bourgogne, founded in 1923, sells similar products primarily in the European and Far East casino markets. Bourgogne is controlled by Paris-based Holding Wilson SA.
Endy assumed control of Paul-Son in November 1998, following the illness of his father. Paul Endy died several months later. Endy now controls 1.85 million Paul-Son shares, or about 52 percent of the company's stock, primarily through his father's trust.
The company has reported mixed results in recent quarters. While it operated in the black in late 1999 and early 2000, Paul-Son has posted losses for the last several quarters. The company blamed these losses on a lack of new casino openings in 2000, compared to previous years. It had been engaging in cost-cutting measures to restore profitability.
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