<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 3)*
Casino Magic Corp.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, $0.01 par value
- --------------------------------------------------------------------------------
(Title of Class of Securities)
147590 10 3
----------------------------
(CUSIP Number)
Timothy J. Cope
Grand Casinos, Inc.
130 Cheshire Lane
Minnetonka, MN 55305
(612) 449-9092
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
December 8, 1997
--------------------------------
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13-1(b)(3) or (4), check the following box / /.
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
<PAGE> 2
SCHEDULE 13D
CUSIP NO. 147590 10 3 PAGE 2 OF PAGES
---------------- --- ------
================================================================================
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Grand Casinos, Inc.
41-1689535
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / /
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
Not Applicable
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED / /
PURSUANT TO ITEMS 2(d) OR 2(e)
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Minnesota
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 2,125,000
OWNED BY ---------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH 0
---------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
2,125,000
---------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,125,000
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) / /
EXCLUDES CERTAIN SHARES*
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.95%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
2 OF 7
<PAGE> 3
SCHEDULE 13D
Item 1. Security and Issuer.
This filing relates to Common Stock of Casino Magic Corp. (the "Issuer"),
711 Casino Magic Drive, Bay Saint Louis, Mississippi 39520.
Item 2. Identity and Background.
Person Filing:
(a) The filing person is Grand Casinos, Inc. (referred to herein as
"Grand").
(b - c) Grand is a Minnesota corporation. Grand is a casino
entertainment company that develops, constructs and manages
gaming and entertainment properties.
For information with respect to the identity and background of
each officer and director of Grand, see Schedule I attached
hereto.
(d - e) During the last five years, neither Grand, nor, to the best
knowledge of Grand, none of the other persons identified in
Schedule I: (i) has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors); or (ii)
was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgement, decree or
final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities
laws or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
On May 26, 1995, Gaming Corporation of America, a Minnesota Corporation
("GCA") acquired shares of the Issuer's Common Stock (the "Shares", as defined
in Item 5(a) below) in consideration of the transfer to the Issuer of all of the
issued and outstanding stock of GCA's wholly-owned subsidiary, Casino One
Corporation ("Casino One"). On November 30, 1995, Grand acquired GCA. As a
result of the acquisition, GCA merged with and into a wholly-owned subsidiary
of Grand ("Sub"). Sub is the record owner of the Shares.
Item 4. Purpose of Transaction.
On May 26, 1995, GCA acquired the Shares in consideration of the transfer
to the Issuer of all of the issued and outstanding stock of GCA's wholly-owned
subsidiary, Casino One. On November 30, 1995, Grand acquired GCA. As a result
of the acquisition, GCA merged with and into Sub. Sub is the record owner of
the Shares.
On March 18, 1997, Grand signed a Confidentiality Agreement (the "Issuer
Confidentiality Agreement") with the Issuer's financial advisor, a copy of
which is filed as Exhibit 3 to this Schedule 13D. Grand did not pursue any
possible transaction with the Issuer at that time. In the middle of December
1997, Grand began to evaluate its investment in the Issuer. Part of Grand's
evaluation resulted in discussions with the Issuer regarding its
investment in the Issuer. On December 9, 1997, Grand reaffirmed in
writing the terms and conditions of the Issuer Confidentiality Agreement a copy
of which is filed as Exhibit 4 to this Schedule 13D. Grand and the Issuer
entered into an additional Confidentiality Agreement on December 12, 1997 a
copy of which is filed as Exhibit 5 to this Schedule 13D.
Discussions between Grand and the Issuer have continued and on January
15, 1998 Grand made a final proposal to the Issuer for the acquisition of all
of the outstanding stock of the Issuer (the "Proposal"), a copy of which is
filed as Exhibit 6 to this Schedule 13D. The Proposal contemplates the
acquisition of 25% of the outstanding shares of the Issuer for cash at a price
of $1.60 per share and the acquisition of 75% of the Issuer's stock at a 7.95
to 1 ratio of the Issuer's shares in exchange for each share of Grand. However,
there can be no assurances that the Proposal will be accepted by the Issuer or
that the transaction will be consummated. Under the terms of the
Proposal, either Grand or the Issuer may terminate the transaction if the
average of the closing bid price of Grand's Common Stock is $11.00 or below
for any five day trading period prior to closing.
Grand does not, in any event, intend to attempt to change directors or
influence control of the Issuer unless it is accomplished pursuant to a
proposal to acquire the Issuer approved by the Issuer's Board of Directors.
<PAGE> 4
Item 5. Interest in Securities of the Issuer.
(a) Grand beneficially owns 2,125,000 shares of the Issuer's Common
Stock, (the "Shares") representing approximately 5.95% of the
35,722,124 shares of Issuer Common Stock outstanding (based on
the Issuer's Form 10-Q for the fiscal quarter ended September
30, 1997).
(b) Grand has sole voting and dispositive power over the Shares.
(c) On May 26, 1995, GCA acquired the Shares in exchange for the
transfer by GCA to the Issuer of all of the issued and
outstanding capital stock of Casino One. On November 30, 1995,
Grand acquired GCA. As a result of the acquisition, GCA merged
with and into Sub. Sub is the record owner of the Shares.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
In connection with the acquisition of the Shares by GCA, GCA and the
Issuer entered into a Registration Agreement pursuant to which the Issuer
agreed to prepare, file and cause to become effective with the Securities and
Exchange Commission a Registration Statement covering the resale of the Shares
and to maintain such Registration Statement in effect for a period not
exceeding two years. The Issuer Confidentiality Agreement provides, in part,
that for a period of one year from the date of the Issuer Confidentiality
Agreement, unless such shall have been specifically invited in writing by the
Issuer, neither Grand nor any of Grand's affiliates (as such term is defined
under the Securities Exchange Act of 1934, as amended (the "1934")) or
Representatives (as defined in the Issuer Confidentiality Agreement) will in
any manner, directly or indirectly, (a) effect or seek, offer or propose
(whether publicly or otherwise) to effect, or cause or participate in or in any
way assist any other person to effect or seek, offer or propose (whether
publicly or otherwise) to effect or participate in (i) any acquisition of any
Securities (as defined in the Issuer Confidentiality Agreement) (or of
beneficial ownership thereof) or assets of the Issuer or any of its
subsidiaries; (ii) any tender or exchange offer, merger or other business
combination involving the Issuer or any of its subsidiaries; (iii) any
recapitalization, restructuring, liquidation, dissolution or other
extradordinary Transaction with respect to the Issuer or any of its
subsidiaries; or (iv) any solicitation of proxies or consents to vote any
voting securities of the Issuer; (b) form, join or in any way participate in a
"group" (as defined under the 1934 Act); (c) take any action which might force
the Issuer to make a public announcement regarding any of the types of matters
set forth in (a) above; or (d) enter into any discussions or arrangements with
any third party with respect to any of the foregoing.
Item 7. Material to be Filed as Exhibits.
Exhibit 1 - Stock Exchange Agreement, dated May 10, 1995, between
the Issuer and GCA.*
Exhibit 2 - Registration Agreement, dated May 26, 1995, between the
Issuer and GCA.*
Exhibit 3 - Confidentiality Agreement dated March 18, 1997 between
the Issuer and Grand.*
Exhibit 4 - Letter dated December 9, 1997 from Grand to the Issuer.*
Exhibit 5 - Confidentiality Agreement dated December 12, 1997
between Grand and the Issuer.*
Exhibit 6 - Final Acquisition Proposal, dated January 15, 1998
from Grand to the Issuer.
*Previously filed.
<PAGE> 5
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, and complete
and correct.
GRAND CASINOS, INC.
By /s/ Timothy J. Cope
----------------------------------
Name: Timothy J. Cope
Title: Chief Financial Officer
Date: January 20, 1998.
<PAGE> 6
Schedule I
Executive Officers and Directors of Grand Casinos, Inc.
<TABLE>
<CAPTION>
Present and
Executive Officers Present Address Principal Occupation Citizenship
- ------------------ --------------- -------------------- -----------
<S> <C> <C> <C>
Lyle Berman Grand Casinos, Inc. Executive Officer and USA
130 Cheshire Lane Chairman of the Board
Minnetonka, MN 55305
Thomas J. Brosig Grand Casinos, Inc. President USA
130 Cheshire Lane
Minnetonka, MN 55305
Stanley M. Taube Grand Casinos, Inc. Executive Vice President USA
130 Cheshire Lane
Minnetonka, MN 55305
Timothy J. Cope Grand Casinos, Inc. Chief Financial Officer USA
130 Cheshire Lane
Minnetonka, MN 55305
Joseph Galvin Grand Casinos, Inc. Chief Administrative USA
130 Cheshire Lane Officer
Minnetonka, MN 55305
<CAPTION>
Present and
Directors Present Address Principal Occupation Citizenship
- --------- --------------- -------------------- -----------
<S> <C> <C> <C>
Lyle Berman Grand Casinos, Inc. Executive Officer and USA
130 Cheshire Lane Chairman of the Board
Minnetonka, MN 55305
Thomas J. Brosig Grand Casinos, Inc. President USA
130 Cheshire Lane
Minnetonka, MN 55305
Stanley M. Taube Grand Casinos, Inc. Executive Vice President USA
130 Cheshire Lane
Minnetonka, MN 55305
Morris Goldfarb G-III President and Chief USA
512 Seventh Avenue Executive Officer
35th Floor
New York, NY 10018
Ronald J. Kramer Ladenburg, Thalmann Chairman of the Board USA
Group Inc. and Chief Executive
540 Madison Avenue Officer
New York, NY 10022
</TABLE>
<PAGE> 7
David L. Rogers Wilson's, The Leather Experts President USA
7401 Boone Avenue North
Brooklyn Park, MN 55428
Joel N. Waller Wilson's, The Leather Experts Chairman and Chief USA
7401 Boone Avenue North Executive Officer
Brooklyn Park, MN 55428
Neil I. Sell Maslon Edelman Borman & Brand, LLP Partner USA
3300 Norwest Center
90 South Seventh Street
Minneapolis, MN 55402
<PAGE> 1
EXHIBIT 3
[WASSERSTEIN PERELLA & CO. LETTERHEAD]
March 18, 1997
Mr. Joseph Valandra
Grand Casinos, Inc.
130 Cheshire Lane
Minnetonka, MN 55305
Dear Joe:
Wasserstein Perella & Co., Inc. ("WP&Co.") is acting on behalf of Casino Magic
Corporation (the "Company") to explore potential strategic and financial
transactions involving the Company or certain subsidiaries of the Company (the
"Transaction"). References herein to the Company include its subsidiaries and
its affiliates. In that connection, you have requested certain information
concerning the Company from officers, directors, employees and/or agents of the
Company, including WP&Co. All such information (whether written or oral)
furnished to you and your Representatives (as defined below), whether prior to,
on or following the date hereof, together with analyses, compilations,
forecasts, studies or other documents or records prepared by you or your
Representatives which contain, are based on or otherwise reflect or are
generated in whole or in part from such information, including that stored on
any computer, word processor or other similar device, are collectively referred
to herein as the "Evaluation Material."
You hereby agree as follows:
(1) You shall use the Evaluation Material solely for the purpose of evaluating
the Transaction and you shall keep the Evaluation Material confidential,
except that you may disclose the Evaluation Material or portions thereof
to those of your directors, officers, employees, affiliates,
representatives (including, without limitation, financial advisors,
attorneys and accountants) and your potential sources of financing (if
any) for the Transaction (collectively, the "Representatives") (a) who
need to know such information for the purpose of evaluating the
Transaction, (b)who are informed by you of the confidential nature of the
Evaluation Material and (c) who agree to be bound by the terms of this
agreement as if they were parties hereto. You shall be responsible for
any breach of this agreement by your Representatives. In the event that
you or any of your Representatives are requested or required (by
deposition, interrogatory, request for documents, subpoena, civil
investigative demand or similar process) to disclose any of the Evaluation
Material, you shall provide the Company with prompt prior written notice
of such requirement, you shall furnish only that portion of the Evaluation
Material which you are advised by written opinion of counsel is legally
required, and you shall exercise your best efforts to obtain reliable
assurance that confidential treatment will be accorded such
Evaluation Material.
<PAGE> 2
(2) If you determine not to proceed with the Transaction, you will promptly
inform WP&Co. of that decision and, in that case or at any time upon the
request of the Company or WP&Co., you and your Representatives shall
promptly either (i) destroy all copies of the written Evaluation Material
in your or their possession or under your or their custody or control
(including that stored in any computer, word processor or similar device)
and confirm such destruction to the Company in writing or (ii) return to
WP&Co. all copies of the Evaluation Material furnished to you by or on
behalf of the Company in your possession or in the possession of your
Representatives. Any oral Evaluation Material will continue to be held
subject to the terms of this agreement.
(3) The term "Evaluation Material" does not include any information which (i)
at the time of disclosure is generally available to and known by the
public (other than as a result of a disclosure by you or by any of the
Representatives) or (ii) was available to you on a nonconfidential basis
from a source (other than the Company or its representatives) that is not
and was not prohibited from disclosing such information to you by a
contractual, legal or fiduciary obligation.
(4) Without the prior written consent of WP&Co., you and your Representatives
shall not disclose to any person (a) that any investigations, discussions
or negotiations are taking place concerning the Transaction or any other
possible Transaction involving the Company and you, (b) that you have
requested or received any Evaluation Material or (c) any of the terms,
conditions or other facts with respect to the Transaction or such
investigations, discussions or negotiations, including the status thereof.
The term "person" as used in this agreement shall be broadly interpreted
to include the media and any corporation, partnership, group, individual
or entity.
(5) You agree that (i) all communications regarding the Transaction, (ii)
requests for additional information, facility tours or management
meetings, and (iii) discussions or questions regarding procedures with
respect to the Transaction, will be first submitted or directed to WP&Co.
and not to the Company. Accordingly, you agree that until the
consummation of the Transaction by you or a third party, you will not,
directly or indirectly, contact or communicate with any officer, director,
employee or agent of the Company without the express prior consent of the
Company or WP&Co. You further agree that, for a period of six months from
the date of this agreement, you will not, directly or indirectly, solicit
for employment any employee of the Company with whom you have had contact
or who became known to you in connection with your consideration of the
Transaction. You acknowledge and agree that (a) WP&Co. and the Company
are free to conduct the process leading up to a possible Transaction as
WP&Co. and the Company, in their sole discretion, may determine
(including, without limitation, by negotiating with any prospective buyer
and entering into a preliminary or definitive agreement without prior
notice to you or any other person), (b) WP&Co. and the Company reserve the
right, in their sole discretion, to change the procedures relating to your
consideration of the Transaction at any time without prior notice to you
or any other person, to reject any and all proposals made by you or any of
your Representatives with regard to the Transaction, and to terminate
discussions and negotiations with you at any time and for any
reason, and (c) unless and until a written definitive
<PAGE> 3
agreement concerning the Transaction has been executed, neither WP&Co. nor
the Company, nor their respective officers, directors, employees,
affiliates, stockholders, agents or controlling persons will have any
legal obligation to you of any kind whatsoever with respect to the
Transaction, whether by virtue of this agreement, any other written or
oral expression with respect to the Transaction or otherwise. For
purposes hereof, the term "definitive agreement" does not include an
executed letter of intent or any other preliminary written agreement, nor
does it include any written or oral acceptance of an offer or bid on
your part.
(6) You agree that, for a period of one year from the date of this agreement,
unless such shall have been specifically invited in writing by the
Company, neither you nor any of your affiliates (as such term is defined
under the Securities Exchange Act of 1934, as amended (the "1934 Act")) or
Representatives will in any manner, directly or indirectly, (a) effect or
seek, offer or propose (whether publicly or otherwise) to effect, or cause
or participate in or in any way assist any other person to effect or seek,
offer or propose (whether publicly or otherwise) to effect or participate
in (i) any acquisition of any Securities (or of beneficial ownership
thereof) or assets of the Company or any of its subsidiaries; (ii) any
tender or exchange offer, merger or other business combination involving
the Company or any of its subsidiaries; (iii) any recapitalization,
restructuring, liquidation, dissolution or other extraordinary Transaction
with respect to the Company or any of its subsidiaries; or (iv) any
solicitation of proxies or consents to vote any voting securities of the
Company; (b) form, join or in any way participate in a "group" (as defined
under the 1934 Act); (c) take any action which might force the Company to
make a public announcement regarding any of the types of matters set forth
in (a) above; or (d) enter into any discussions or arrangements with any
third party with respect to any of the foregoing.
(7) You acknowledge that you and your Representatives may receive material
non-public information in connection with your evaluation of the
Transaction and you are aware (and you will so advise your
Representatives) that the United States securities laws impose
restrictions on trading in securities when in possession of such
information.
(8) You understand and acknowledge that none of the Company, WP&Co. or any of
their respective officers, directors, employees, affiliates, stockholders,
agents or controlling persons is making any representation or warranty,
express or implied, as to the accuracy or completeness of the Evaluation
Material, and each of the Company, WP&Co. and such other persons expressly
disclaims any and all liability to you or any other person that may be
based upon or relate to (a) the use of the Evaluation Material by you or
any of the Representatives or (b) any errors therein or omissions
therefrom. You further agree that you are not entitled to rely on the
accuracy and completeness of the Evaluation Material and that you will be
entitled to rely solely on those particular representations and
warranties, if any, that are made to a purchaser in a definitive agreement
relating to the Transaction when, as, and if it is executed, and subject
to such limitations and restrictions as may be specified in such
definitive agreement.
<PAGE> 4
(9) You acknowledge that remedies at law may be inadequate to protect the
Company against any actual or threatened breach of this agreement by you
or your Representatives, and, without prejudice to any other rights and
remedies otherwise available to the Company, you agree to the granting of
equitable relief in the Company's favor without proof of actual damages.
You agree to indemnity and hold harmless the Company from any damage,
loss, cost or liability (including reasonable legal fees and disbursements
and the costs of enforcing this indemnity) arising out of or resulting
from any unauthorized use or disclosure by you or your
Representatives of the Evaluation Material.
(10) You agree that no failure or delay by the Company in exercising any right,
power or privilege hereunder will operate as a waiver thereof, nor will
any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder.
(11) This agreement is for the benefit of the Company and WP&Co. and their
respective successors and assigns. The rights of the Company under this
agreement may be assigned in whole or in part to any purchaser of the
Company, which purchaser shall be entitled to enforce this agreement to
the same extent and in the same manner as the Company is entitled to
enforce this agreement.
(12) This agreement and all controversies arising from or relating to
performance under this agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect
to its conflicts of laws principles.
(13) This agreement contains the entire agreement between you and the Company
concerning the subject matter hereof, and no modification of this
agreement or waiver of the terms and conditions hereof will be binding
unless approved in writing by the Company and you.
<PAGE> 5
Please confirm your agreement to the foregoing by signing both copies of this
agreement and returning one to WP&Co., Attn.: Leslie Stone Abraham.
Very truly yours,
WASSERSTEIN PERELLA & CO., INC.
By: /s/ Leslie S. Abraham
---------------------
Leslie Stone Abraham
Managing Director
ACCEPTED AND AGREED TO:
GRAND CASINOS, INC.
By: /s/ Joseph Valandra
-------------------
Vice President
Joseph Valandra
<PAGE> 1
EXHIBIT 4
[GRAND CASINOS, INC. LETTERHEAD]
December 9, 1997
Leslie Stone Abraham
Wasserstein Perella & Co.
1999 Avenue of the Stars, Suite 2950
Los Angeles, CA 90067
Dear Leslie:
This letter is to reaffirm the terms and conditions contained in your March
18,1997 letter regarding Casino Magic Corporation and the Evaluation Material
that may be provided to Grand Casinos, Inc.
We are continuing our use of the Evaluation Material previously provided to us
and will require updated and additional information. We agree that all such
information shall be subject to the March 18, 1997 letter.
Please contact me with any questions or comments.
Sincerely,
GRAND CASINOS, INC.
/S/ Joseph M. Valandra
Joseph M. Valandra
Vice President
cc: Bruce Martin
Andrew Shupak
<PAGE> 1
EXHIBIT 5
December 12, 1997
By Facsimile (601-466-8061)
Casino Magic Corp.
Attn. Marlin Torguson, Chairman
711 Casino Magic Drive
Bay St. Louis, Mississippi 39520
Re: Casino Magic Corp.
Dear Mr. Torguson:
I understand that Casino Magic Corp. ("Casino Magic") desires to evaluate
potential business transactions between Casino Magic and Grand Casinos, Inc.,
and that Casino Magic has engaged Wasserstein Perella & Co. ("Wasserstein
Perella") to advise and assist Casino Magic with respect to such evaluation.
Wasserstein Perella and Casino Magic will request certain information from
Grand Casinos, Inc. and its subsidiaries (collectively "Grand Casinos") to
enable Wasserstein Perella and Casino Magic to perform such evaluation.
Grand Casinos requires, as a condition to Grand Casinos providing such
information to Wasserstein Perella and Casino Magic, that Casino Magic treat
all information provided by Grand Casinos to either Wasserstein Perella or
Casino Magic in accordance with the provisions of this letter. Such
information is collectively referred to in this letter as the "Evaluation
Material."
By signing this letter, Casino Magic agrees to all of the terms and conditions
stated in this letter.
Casino Magic agrees that the Evaluation Material shall be used solely for the
purpose of evaluating potential transactions ("Potential Transactions") between
Casino Magic and Grand Casinos and/or Grand Casinos' shareholders. Casino
Magic shall keep the Evaluation Material confidential, but may disclose the
Evaluation Material to Casino Magic's agents, representatives (including
Wasserstein Perella), consultants, attorneys, and financing sources
(collectively the "Representatives" and individually a "Representative") solely
for the purpose of evaluating Potential Transactions. Casino Magic shall
advise each Representative who receives any of the Evaluation Material of the
confidential nature of such Evaluation Material, and shall direct such
Representative to treat such Evaluation Material confidentially and in a manner
consistent with this letter. Casino Magic shall be responsible for any failure
of any Representative to treat any Evaluation Material in a manner that is not
consistent with this letter.
<PAGE> 2
December 12, 1997
Page 2
The restrictions on the use and disclosure of Evaluation Material stated in
this letter shall not apply to the following:
(a) information made available to the public prior to the date of this
letter;
(b) information made available to the public on or after the date of this
letter to the extent (and only to the extent) such information was made
available other than as a result of any action by Casino Magic or any
Representative;
(c) information rightfully in the possession of Casino Magic or any
Representative prior to the use or disclosure of such information by
Casino Magic and/or such Representative and not governed by this letter;
and
(d) information which is obtained by Casino Magic and/or any
Representative from any party other than Grand Casinos who, insofar as
is known to Casino Magic and/or such Representative, may disclose such
information to Casino Magic or such Representative without breaching any
obligation not to disclose such information.
If no transaction is effected between Casino Magic and Grand Casinos and/or
Grand Casinos' shareholders after Grand Casinos has provided any Evaluation
Material to Casino Magic and/or any Representative, Casino Magic shall cause
all such Evaluation Material, and all copies thereof, to be promptly returned
to Grand Casinos. Casino Magic shall also in such event promptly cause the
destruction of all analyses, compilations, summaries, reports, studies and
other documents based on, using, including or relying on any portion of the
Evaluation Material and prepared by, for or on behalf of Casino Magic and/or
any Representative.
Upon written request of Grand Casinos, Casino Magic shall from time-to-time
provide to Grand Casinos written confirmation that Casino Magic has complied
with the provisions of the preceding paragraph.
Grand Casinos shall arrange for all contacts by Casino Magic and/or any
Representatives with Grand Casinos' directors, officers and employees with
respect to the evaluation contemplated by this letter (including due diligence
by or on behalf of Casino Magic). Until the earlier of (i) Casino Magic's
signing of a definitive agreement relating to a Potential Transaction, or (ii)
12
<PAGE> 3
December 12, 1997
Page 3
months after the date of this letter, Casino Magic shall not, except in the
ordinary course of Casino Magic's business or pursuant to Grand Casinos' prior
written consent, initiate or maintain contact with any director, officer or
employee of Grand Casinos with whom Casino Magic and/or any Representative has
contact pursuant to this letter. Unless otherwise agreed to in writing by
Grand Casinos, all communications by Casino Magic and/or Representatives under
this letter (including requests for Evaluation Material) shall be submitted or
directed to Timothy J. Cope or Joseph M. Valandra (or a designee of either
such person).
Except to the extent otherwise required by applicable law or stock exchange
rule or regulation, Casino Magic shall not, and shall cause the Representatives
to not, make any public statement or disclosure regarding this letter or any
Potential Transaction without Grand Casinos' prior written consent.
By signing this letter and accepting Evaluation Material, Casino Magic
acknowledges and agrees that all Evaluation Material is provided by Grand
Casinos without representation or warranty of any kind (including as to
accuracy or completeness). Casino Magic agrees that Casino Magic will be
solely responsible for evaluating any Potential Transaction, and will enter
into any Potential Transaction only after Casino Magic has determined that it
has taken all actions that, in Casino Magic's sole determination, are necessary
and/or appropriate to evaluate the feasibility and desirability of such
Potential Transaction.
For a period of 12 months after the date of this letter, Casino Magic shall
not, without the prior written consent of Grand Casinos, do any of the
following:
(a) directly or indirectly acquire more than 1% of the outstanding stock of
Grand Casinos, Inc.; or
(b) solicit proxies or become a "participant" in a "solicitation" (as
such terms are defined in Regulation 14A under the Securities and
Exchange Act of 1934) in opposition to the recommendation of the
directors of Grand Casinos, Inc. with respect to any matter; or
(c) make any proposal to Grand Casinos and/or Grand Casinos' shareholders
for any merger, share exchange or business combination involving Grand
Casinos, or for the acquisition of all or substantially all of Grand
Casinos' assets or join a partnership, syndicate or other group, or
otherwise act in
<PAGE> 4
December 12, 1997
Page 4
concert with any other person or persons, for the purpose of acquiring,
holding or disposing of any stock of Grand Casinos, or otherwise become
a "person" within the meaning of Section 13(d)(3) of the Securities and
Exchange Act of 1934 for the purpose of effecting any of the actions
described in clauses (a) through (c) of this sentence.
Casino Magic acknowledges and agrees that a breach of the terms and conditions
of this letter will cause irreparable harm to Grand Casinos, and that Grand
Casinos' remedy at law for any such breach will be inadequate. Accordingly,
Casino Magic agrees that Grand Casinos shall, in addition to any remedy
available at law or otherwise, have the right to enforce this letter by legal
action or proceeding against Casino Magic.
This terms and conditions stated in this letter are for the benefit of Grand
Casinos. This letter shall be governed by the laws of the State of Minnesota.
If the terms and conditions of this letter are acceptable to Casino Magic,
please arrange for Casino Magic to sign and return to me one copy of this
letter.
Sincerely yours,
/S/ Joseph M. Valandra
Joseph M. Valandra
Vice President
The foregoing terms and condition are hereby accepted and agreed to as of this
6th day of December, 1997.
Casino Magic Corp.
By: /s/ Marlin Torguson
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Name: Marlin Torguson
-----------------
Title: Chairman
----------------
<PAGE> 1
Exhibit 6
[GRAND CASINOS, INC. LETTERHEAD]
January 15, 1998
Via Fax CONFIDENTIAL
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Marlin Torguson
Chairman
Casino Magic Corporation
(601) 466-8061
Dear Marlin:
This letter is to convey our final proposal for the merger of Grand Casinos,
Inc. ("Grand") and Casino Magic Corporation ("Magic").
The transaction this proposal contemplates would be a tax-free merger. Grand's
offer would be for all of the outstanding stock of Magic. Grand would acquire
25% of the outstanding shares of Magic at a cash price of $1.60. The remaining
75% of the outstanding shares of Magic will be acquired with Grand Stock at a
7.95 to 1 ratio (every 7.95 shares of Magic will be converted into 1 share of
Grand). If the moving average of the closing price (bid) of Grand stock for
any 5 trading days prior to Closing is $11.00 or below both parties have the
option to renegotiate or walk away from the transaction without penalty.
Grand is prepared to accept the amended severance arrangements as represented
by Magic and to accept the fee arrangement with Wasserstein (1% of total
transaction value).
The transaction would be subject to ordinary and reasonable conditions,
including but not limited to, fairness opinions, Governmental consents, Board
approvals, Shareholder approvals, completion of due diligence, and no material
adverse changes.
Upon acceptance of this proposal it will be necessary to proceed promptly and
in good faith to the preparation and execution of documentation necessary to
consummate this transaction. It would be intended that the parties use their
best efforts to execute a Definitive Agreement within 10 days of the date of
this letter. Neither party would have any obligation to the other with respect
to this transaction until the Definitive Agreement is signed.
We look forward to your response to this proposal as soon as possible.
GRAND CASINOS, INC.
/s/ Lyle Berman
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Lyle Berman
Chairman & CEO
