Exhibit 99.2
------------
TBR ACQUISITION GROUP, LLC
1890 Palmer Avenue
Suite 303
Larchmont, New York 10531
January 23, 2006
Special Committee of the Board of Directors of
MTR Gaming Group, Inc.
State Route 2 South
P.O. Box 358
Chester, West Virginia 26034
Attn: Donald Duffy, Chairman of the Special Committee
Gentlemen:
On November 3, 2005, TBR Acquisition Group, LLC (the "Acquisition
LLC"), a Delaware limited liability company formed by Edson R. Arneault, Robert
A. Blatt, and Robert L. Ruben (together with the Acquisition LLC, the
"Purchasers" or "we"), 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 purchase price in cash which represented a substantial premium over the
closing price of the Company's common stock at the time of such Initial
Proposal. Subsequently, on December 1, 2005, the Purchasers submitted a revised
proposal (together with the Initial Proposal, the "Offer") to the Board of
Directors of the Company which, among other things, increased the per share
purchase price for the Company's common stock. In furtherance of the Offer, in
mid-December the Purchasers submitted a draft Agreement and Plan of Merger (the
"Merger Agreement") to counsel to the Special Committee of the Board of
Directors of the Company (the "Special Committee").
Due to the substantial passage of time since the Initial Proposal was
first submitted to the Board of Directors of the Company and the absence of any
meaningful substantive response from the Special Committee with respect to the
terms of the Offer and the Merger Agreement, please be advised that we are
respectfully withdrawing our Offer effective as of 5:00 p.m. New York City time
on January 30, 2006 (the "Expiration Date"), unless the Special Committee, on
the Company's behalf, delivers to the Purchasers on or prior to the Expiration
Date (i) a meaningful substantive response with respect to the terms of the
Offer and the Merger Agreement (a "Substantive Response") and (ii) an executed
counterpart to this letter agreeing to be bound by the following exclusivity
provision.
In order to induce the Purchasers to continue their pursuit of the
Offer, the Special Committee, on the Company's behalf, hereby acknowledges and
agrees that, for a period of forty-five (45) days from the Purchasers' receipt
of an executed counterpart to this letter signed by the Special Committee on the
Company's behalf, neither the Company nor any of the Company's stockholders,
officers, or directors shall, and the Company shall cause its employees, agents
and representatives (including, without limitation, any investment banking firm
retained by it and any individual member or employee of such firm) not to, (i)
initiate, solicit or seek, directly or indirectly, any inquiries or the making
or implementation of any proposal or offer (including, without limitation, any
proposal or offer to its stockholders or any of them) with respect to a merger,
acquisition, consolidation, recapitalization, liquidation, dissolution or
similar transaction involving, or any purchase of all or any substantial portion
of the assets or any equity securities of, the Company or any of its
subsidiaries (any such proposal or offer being hereinafter referred to as an
"Acquisition Proposal"), or (ii) engage in any negotiations concerning, or
provide any confidential information or data to, or have any substantive
discussions with, any person relating to an Acquisition Proposal, or (iii)
otherwise cooperate in any effort or attempt to make, implement or accept an
Acquisition Proposal.
The Offer shall automatically, and without any further action on
behalf of the Purchasers, be withdrawn on the Expiration Date, unless the
Special Committee, on the Company's behalf, delivers (i) a Substantive Response
and (ii) an executed counterpart to this letter, in each case, to the
undersigned at the address first set forth above on or prior to the Expiration
Date.
We look forward to receiving your Substantive Response and an executed
counterpart to this letter and working with you to consummate a transaction that
will create substantial value for the Company and its stockholders. If you
decide not to provide a Substantive Response or execute this letter and the
Offer is withdrawn, we believe the full Board of Directors should meet on the
business day following the Expiration Date in order to formally dissolve the
Special Committee and to discuss long-term plans for enhancing value for our
stockholders.
Very truly yours,
/s/ Robert A. Blatt
Robert A. Blatt
Managing Member
ACKNOWLEDGED AND AGREED:
MTR GAMING GROUP, INC.
By:___________________________
Name: Donald Duffy
Title: Chairman of the Special Committee of
the Board of Directors of MTR Gaming Group, Inc.