Judge clears way for Acres vote

Monday, Sept. 22, 2003 | 10:47 a.m.

A Clark County District Court judge has denied a motion by a disgruntled shareholder for a temporary restraining order to stop slot maker International Game Technology from buying a Las Vegas software company.

The denial Friday by Judge Michelle Leavitt paves the way for stockholders to vote on the merger of IGT and Acres Gaming Inc., a company that makes software that tracks gamblers' play.

The Acres shareholder meeting is scheduled for Friday.

A federal court judge had issued a temporary restraining order early this month before moving the case to state court. That order had postponed a shareholder meeting on the merger that had originally been scheduled for Sept. 12.

In June, shareholder Paul Miller filed suit in Clark County District Court against Acres Gaming, claiming that Acres directors violated their fiduciary duties to stockholders by agreeing to the deal.

Last month, Acres moved the case to federal court and moved to dismiss the case.

In court Friday, Judge Leavitt said Miller -- who was seeking class action status for his suit -- could not show that "irreparable harm" had been done.

The buyout offer will deprive shareholders of future growth in a stock that has tripled in just a few years, Miller's attorneys argued.

Under the terms of the agreement, IGT will pay $11.50 per share for Acres in an all-cash transaction.

The price is lower than some analysts have estimated and also translates into a lower premium than was offered three years ago when Acres considered another buyout offer, they said.

Acres also didn't shop for other offers before it accepted IGT's bid, they added.

Potential bidders for Acres represent "a very small pool indeed" because they must also be licensed to do business in Nevada, Acres attorney Paul Hejmanowski said.

That the shares should be worth more is based on speculation involving the past performance of the stock, information posted on the Internet and disagreement among analysts, he said.

"It is not an appropriate (method) to stop a $130 million-dollar merger," he said.

The merger also is subject to approval by Nevada gaming regulators, who are set to consider the deal next month.