Exhibit 99.3
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TBR ACQUISITION GROUP, LLC
1890 Palmer Avenue
Suite 303
Larchmont, New York 10531
December 1, 2005
MTR Gaming Group, Inc.
State Route 2 South
P.O. Box 358
Chester, West Virginia 26034
Ladies and Gentlemen:
On November 3, 2005, TBR Acquisition Group, LLC (the "Acquisition
LLC"), a Delaware limited liability company recently formed by Edson R.
Arneault, Robert A. Blatt, and Robert L. Ruben (together with the Acquisition
LLC, the "Purchasers"), submitted a proposal (the "Initial Proposal") to the
Board of Directors of MTR Gaming Group, Inc. (the "Company"), whereby the
Acquisition LLC would acquire all of the issued and outstanding shares of common
stock of the Company not already owned by the Purchasers or their affiliates for
a price of Nine Dollars ($9.00) per share in cash.
At the time the Initial Proposal was delivered to the Board of
Directors of the Company, such proposal provided the Company's shareholders with
a greater than thirty-three percent (33%) premium over the closing price on
November 2, 2005 of Six Dollars and Seventy Three Cents ($6.73) per share and a
greater than twenty-five percent (25%) premium over the average closing price
per share for the thirty (30) trading days prior to November 3, 2005.
Based on the closing price of the Company's common stock on December
1, 2005, and in order to maintain a substantial premium for the Company's
shareholders, the Purchasers have agreed to increase their offer to purchase all
of the issued and outstanding shares of common stock of the Company not already
owned by the Purchasers or their affiliates to a price of Nine Dollars and Fifty
Cents ($9.50) per share in cash (the "Revised Offer Price").
The Purchasers believe that the Revised Offer Price is fair to, and in
the best interests of, the Company and its shareholders based upon the cash
premium to be paid by the Purchasers and the risks and pressures facing the
Company, as more fully described in the Initial Proposal.
The Initial Proposal contemplated, among other things, that the
Company would need to consent to Jefferies & Company, Inc. serving as financial
advisor to the Acquisition LLC, including providing financing for the proposed
transaction. The Initial Proposal also contemplated, among other things, that
the Purchasers and the Company would enter into a non-binding letter of intent,
except for certain binding provisions, such as the reimbursement by the Company
of the Purchasers' expenses in the event the Company elects to proceed with a
superior priced proposal. In light of the fact that the Company has consented to
Jefferies & Company, Inc. serving as financial advisor to the Acquisition LLC,
including providing financing for the proposed transaction, and that the Company
and the Purchasers have reached an agreement on the reimbursement by the Company
of the Purchasers' actual, out-of-pocket expenses, up to an agreed upon maximum
dollar amount, in the event the Company elects to proceed with a superior priced
proposal, the Purchasers have agreed not to pursue a non-binding letter of
intent at this time.
Neither the Company, on the one hand, nor the Purchasers, on the
other, will have any legal obligation relating to the Initial Proposal and/or
the Revised Offer Price until mutually satisfactory definitive agreements have
been executed by all parties.
Except as otherwise set forth in this letter, all of the terms and
conditions of the Initial Proposal shall remain substantially unchanged.
This letter is merely a statement of our current intention and does
not constitute a firm or binding offer.
We reserve the right to amend or withdraw our Initial Proposal and/or
the Revised Offer Price and to terminate further discussions at any time prior
to the execution of definitive agreements.
Please let us know at your earliest convenience how you wish to
proceed. We look forward to hearing back from you with respect to this
significant opportunity for the Company and its shareholders.
Very truly yours,
/s/ Robert A. Blatt
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Robert A. Blatt
Managing Member