Billionaire Dan Gilbert is a step closer to gaining majority control of Greektown Casino-Hotel, after agreeing to a deal that protects the casino's minority shareholders and offers them the right to sell their remaining shares for $90 a share.
Under the deal announced by Greektown Superholdings Inc., Tuesday, Gilbert — through his company, Athens Acquisitions LLC — would own approximately 75 percent of Greektown shares, pending approval of the Michigan Gaming Control Board. Gilbert's company declined comment on the deal Tuesday.
The Michigan Gaming Control Board could consider the sale at its April 9 meeting.
Gilbert, who owns two Ohio casinos and has a minority share in a Baltimore casino, made known his plans to acquire a majority share of Greektown Casino-Hotel in January and offered $81 a share. He had made multiple share purchases of Greektown before then, dating back to June, according to filings with the Security Exchange Commission.
Gaming analysts saidthe higher offer in Tuesday's agreement likely appeases the casino's minority shareholders. The analysts surmised many minority shareholders were angered by the $81 offer and might have sued, contending Greektown's board didn't seek the best possible offer. Such litigation could have tied up the sale for years.
"With this announcement, the last major hurdle is going to be regulatory approval," said Alexander Calderone, senior vice president of the Finepoint Group, a Las Vegas-based gaming management and consultant firm.
"This addresses one of the last remaining significant obstacles—coming to terms with the minority shareholders. It was something that needed to be addressed."
If a deal had not been reached, angry shareholders would have likely sued, gaming officials and merger experts say.
"This could have ended up in litigation, and nobody wanted it there," said John Truscott , a spokesman for a committee overseeing negotiations for Greektown.
"It could have delayed everything for years."
Greektown Casino Hotel is owned by a group of out-of-state hedge and mutual funds.
Since the casino opened in November 2000 — initially managed by the Sault Ste. Marie Tribe of Chippewa Indians — it has gone through bankruptcy and struggled to grow.
Of Detroit's three casinos, Greektown is the smallest, nabbing 25 percent of the revenue, according to the Michigan Gaming Control Board. MotorCity Casino is second with 32.3 percent, and MGM Grand Detroit leads with 42.7 percent.
Erik Gordon, professor at U-M's Law School and an assistant clinical business professor at U-M's Ross School of Business, said Gilbert is likely to seek the remaining 25 percent ownership of Greektown because outright control would offer him fewer headaches.
"You don't want to have minority shareholders second-guessing you and making it tough every time you make a decision," Gordon said. "Gilbert is a take-charge guy. He wants to do what he thinks will make Greektown a great investment."
As news broke in January of Gilbert's interest in Greektown, he signaled the establishment could get a major overhaul, even though the current owners have made upgrades and added amenities, including restaurants and valet parking.
The casino plan fits the pattern of Gilbert making big investments in an effort to revitalize Detroit's downtown.
The trend began in August 2010 when the founder and chairman of Quicken Loans Inc. relocated the headquarters of the nation's largest online home mortgage lender to Detroit from Livonia. Since then, more than 7,000 people from his portfolio of companies have been moved downtown.