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Dave & Buster's deal moving toward close despite incomplete tender
By Paul A. Harris
St. Louis, Mo., July 11 - D&B Acquisition Sub, Inc. still has Monday as the target date to close on its $155 million of senior secured notes due July 15, 2009 (B2/B), an informed source told Prospect News, even though the company announced Wednesday that its tender offer for Dave & Buster's stock expired without being completed.
"As of right now the sponsor and the company and the bookrunners are proceeding to close the transaction on Monday," the source commented.
Dave & Buster's, Inc. announced Wednesday that the tender offer by D&B Acquisition Sub, a group led by its founders and certain members of Dave & Buster's senior executive management together with Investcorp, expired without sufficient shares being tendered to complete the transaction. Approximately 6.2 million shares (45.8% of the outstanding shares) were tendered but will not be accepted for payment.
The source told Prospect News that the sponsor is seeking alternative ways to get control of the company.
"The stock was down pretty substantially Wednesday, making their $12.00 [per share] tender, which they pulled, look a little bit more attractive," the source said. Dave & Buster's stock closed at $10.98 Thursday.
There are three possible scenarios with regard to Monday's announced settlement date, the source added: 1) the company could relaunch the tender, a 20-day process that, according to the source is unlikely, 2) the company closes on the bonds and executes a proxy solicitation (the source commented that the bond proceeds will go into escrow in any case), or 3) the issuer pulls away from the transaction and the bond deal is pulled.
D&B Acquisition's notes priced on June 28 at 96.620 to yield 13%. The deal was downsized by $10 million. UBS Warburg and Deutsche Bank Securities Inc. were joint bookrunners.
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