Z Capital Partners filed an investor presentation supporting its nomination of two candidates to the Affinity Gaming Board. Z Capital currently owns more than 30% of Affinity Gaming. Z Capital Partners ha
sd offered to buy all the outstanding shares of Affinity Gaming that it doesn’t own. UPDATE: Z Capital has since rescinded the offer, a spokesman says.
Z Capital Partners, L.L.C. (“Z Capital”), a Chicago-based private equity firm and the largest shareholder in Affinity Gaming (the “Company” or “Affinity”), with over 30% of outstanding shares, today filed an investor presentation supporting its nomination of two highly qualified, independent candidates to the Affinity Gaming Board. The presentation is available on the “Media Room” tab of Z Capital’s web site at www.zcap.net and will be filed with the Securities and Exchange Commission (“SEC”) later today.
The presentation includes information regarding Z Capital’s proposal for a new Affinity Board consisting of seven members, including nominees from investors Z Capital and Silver Point Capital L.P. (“Silver Point”). Z Capital believes that a proper, balanced Board reflecting a range of perspectives from shareholders, industry experts and management is in the best interests of all Affinity shareholders. In particular, the presentation provides details of Z Capital’s operational, financial, corporate governance and industry experience, as well as its deep pool of resources that will be a catalyst for maximizing shareholder value. Additionally, the Board proposed by the Company and Silver Point, which does not include nominees from Z Capital, will effectively mean that Silver Point is taking control of the Company. Leaving the Board in the hands of a single shareholder is a decision Z Capital believes is unwise and does not ensure that all shareholders’ interests are protected.
Specifically, the presentation illustrates the following key points:
• The Affinity Board has failed to demonstrate the skill, expertise, or governance best practices that Affinity’s shareholders deserve and has not acted in the best interests of shareholders.
• A Silver Point dominated Board is not in the best interest of all shareholders.
◦ Silver Point was influential in seating the current Board, including Chairman Don Kornstein , and the Company’s four new “independent” nominees were all selected by Silver Point.
• Z Capital is nominating two highly qualified, independent candidates that offer necessary balance and perspective to round out the Board.
◦ Z Capital has been the most vigilant and vocal shareholder in protecting ALL shareholder rights and in scrutinizing the Board’s actions.
◦ Z Capital has a long and successful track record of working collaboratively with fellow board members and management at portfolio companies in developing a unified, value-maximizing strategy for all.
◦ Z Capital’s nominees have had extensive interaction with Affinity’s state gaming regulators (Nevada, Iowa, Missouri, and Colorado) and Z Capital, along with James J. Zenni, Jr. , have been “found suitable” in those states. Additionally, Mr. Zenni has nearly two decades of experience investing in gaming companies both large cap and small cap.
◦ Z Capital’s nominees have the operational, corporate governance and financial skills and experience needed by the Board at this time.
Z Capital believes that if the slate of directors nominated by the Company and Silver Point, with Mr. Kornstein as the Chairman, obtains control, then significant shareholder value will continue to be hindered. Z Capital further notes that now is the time for a well-balanced, highly qualified Board to be elected to protect shareholder value.
Z Capital urges all shareholders to vote the gold proxy card today to maximize their investment in the Company and ensure that the Board and management act in the best interest of shareholders.
About Z Capital Partners
Z Capital Partners, L.L.C. is a leading Chicago-based private equity firm that specializes in making investments in distressed middle market companies utilizing the restructuring and/or bankruptcy process, opportunistic acquisitions and special situations. Z Capital utilizes its operational and restructuring expertise to work with management on enhancing enterprise value and achieving superior risk-adjusted returns for its investors. Z Capital’s investors include prominent global endowments, financial institutions, pension funds, insurance companies, foundations, family offices, and wealth management firms. For more information, please visit www.zcap.net
The Z Capital Group (whose members are identified below) has nominated James J. Zenni, Jr. and Martin J. Auerbach, Esq. (the “Z Capital Nominees”) as nominees to the board of directors of the Company and is soliciting votes for the election of the Z Capital Nominees as members of the board. The Z Capital Group has sent a definitive proxy statement, GOLD proxy card and related proxy materials to stockholders of the Company seeking their support of the Z Capital Nominees at the Company’s 2013 Annual Meeting of Stockholders. Stockholders are urged to read the definitive proxy statement and GOLD proxy card because they contain important information about the Z Capital Group, the Z Capital Nominees, the Company and related matters. Stockholders may obtain a free copy of the definitive proxy statement and GOLD proxy card and other documents filed by the Z Capital Group with the SEC at the SEC’s web site at www.sec.gov. The definitive proxy statement and other related documents filed by the Z Capital Group with the SEC may also be obtained free of charge by contacting Innisfree M&A Incorporated by mail at 501 Madison Avenue, 20th Floor, New York, New York 10022 or by telephone at the following numbers: stockholders call toll-free at (888) 750-5834 and banks and brokers call collect at (212) 750-5833.
The Z Capital Group consists of the following persons: Z Capital Partners, L.L.C.; Zenni Holdings, LLC; James J. Zenni, Jr. ; Z Capital Special Situations Adviser, L.P.; Z Capital Special Situations GP, L.P.; Z Capital Special Situations UGP, L.L.C.; Z Capital Special Situations Fund Holdings I, L.L.C.; Z Capital HG, L.L.C.; Z Capital Special Situations Fund Holdings II, L.L.C.; Z Capital CUAL Co-Invest, L.L.C.; and Z Capital HG-C, L.L.C. The members of the Z Capital Group and the Z Capital Nominees are participants in the solicitation from the Company’s stockholders of proxies in favor of the Z Capital Nominees. Such participants may have interests in the solicitation, including as a result of holding shares of the Company’s common stock. Information regarding the participants and their interests may be found in the definitive proxy statement of the Z Capital Group, filed with the SEC on April 23, 2013 and first disseminated to stockholders on or about April 23, 2013.
Certain information contained herein constitutes “forward-looking statements,” which can be identified by the use of forward-looking terminology such as “may,” “will,” “seek,” “should,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue” or “believe” or the negatives thereof or other variations thereon or comparable terminology. Such statements are not guarantees of future performance or activities. Due to various risks and uncertainties, actual events or results or actual performance may differ materially from those reflected or contemplated in such forward-looking statements.