SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date earliest event reported) DECEMBER 23, 2002
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MTR GAMING GROUP, INC.
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(exact name of registrant as specified in its charter)
DELAWARE
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(State or other jurisdiction of incorporation)
84-1103135
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(Commission File Number) (IRS Employer Identification Number)
STATE ROUTE 2 SOUTH, CHESTER, WEST VIRGINIA
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(Address of principal executive offices)
26034
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(Zip Code)
Registrant's Telephone Number, Including Area Code: (304) 387-8300
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N/A
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(Former name or former address, if changed since last report)
Item 5. OTHER EVENTS.
On December 23, 2002, MTR Gaming Group, Inc. ("MTR") and Scioto Downs,
Inc. ("Scioto") executed a Merger Agreement pursuant to which, upon and subject
to consummation of the merger as provided in such agreement, Scioto will become
a wholly-owned subsidiary of MTR.
Pursuant to the Merger Agreement, MTR has agreed to pay $32.00 per
share, in cash, for the 595,767 outstanding shares of Scioto's common stock.
Each Scioto shareholder may elect to receive, instead of the $32.00 per share
amount, an amount equal to $17.00 plus, in certain circumstances set forth in
the Merger Agreement, ten (10) annual contingent earnout payments based upon 10%
of the growth of Scioto's EBITDA (earnings before interest, taxes, depreciation
and amortization) compared to the average of Scioto's EBITDA for the three
fiscal years ending October 31, 2002. In the event any contingent earnout
payment is prohibited by an authorized governmental authority, a final payment
of $15.00 per share would be made instead. If the contingency set forth in the
merger agreement is not satisfied, however, Scioto shareholders who elected the
contingent earnout payment would receive only the $17 per share amount.
The Merger Agreement is subject to termination by either party if the
merger is not consummated on or before December 31, 2003. The merger transaction
has been approved by the Boards of Directors of both MTR and Scioto.
Consummation of the transaction is subject to various customary
conditions, including, among other things, MTR's successful completion of its
due diligence review, approval by MTR's lenders, approval by Scioto's
shareholders and the obtaining of all necessary regulatory approvals, including
but not limited to the Ohio Racing Commission.
MTR expects to finance the transaction with a combination of cash on
hand, cash flow from operations and borrowings under MTR's lines of credit.
Additionally, MTR anticipates that prior to Scioto's mailing of its proxy
statement to its shareholders, MTR will have obtained a bank commitment for any
additional funding required to complete the merger, although no assurances can
be given.
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION:
Except for historical information, this report contains forward-looking
statements concerning, among other things, future plans and operating results,
and specifically, the consummation of the merger transaction and its impact on
MTR. Such statements are based on MTR's current plans and expectations and are
subject to a number of risks and uncertainties that could cause the statements
made to be incorrect and/or for actual results to differ materially. Those risks
and uncertainties, with respect to consummation of the merger, include but are
not limited to due diligence, satisfaction of all closing conditions set forth
in the merger agreement, receipt of all regulatory approvals, financing, and
compliance by all parties with the material terms of the merger agreement. With
respect to forward-looking statements concerning operations and results upon a
closing of the merger transaction, such risks and uncertainties
include but are not limited to successful integration of Scioto's operations
into MTR's operations, retention of Scioto's key personnel and the ability to
attract new personnel to Scioto, successful cross marketing of Scioto with MTR's
Mountaineer Racetrack & Gaming Resort, Scioto's history of operating losses, the
impact of accounting for good will in the transaction, and other factors
described in MTR's periodic reports filed with the Securities and Exchange
Commission. MTR does not intend to update publicly any forward-looking
statements, except as may be required by law.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Not applicable.
(b) Not applicable.
(c) EXHIBITS:
EXHIBIT NO. DESCRIPTION
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10.1 Agreement and Plan of Merger dated December 23, 2002, entered into
by and among the registrant and Scioto Downs, Inc. and Racing
Acquisition
99.1 Press Release dated December 24, 2002
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
MTR GAMING GROUP, INC.
By: \s\ Edson R. Arneault
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Edson R. Arneault, President
Date: December 24, 2002
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