Los Angeles, Oct. 8 (Bloomberg) -- Las Vegas Entertainment
Network Inc., an unprofitable company with no revenue, offered to
buy Jackpot Enterprises Inc. for $95 million in cash.
The unsolicited $11-a-share bid, disclosed in a Securities
and Exchange Commission filing, is 28 percent more than Jackpot's
price yesterday. Jackpot stock rose 1 1/8 to 9 3/4 on late
trading. Las Vegas Entertainment rose 1 1/2 to 5 1/8. It soared
as high as 9 1/8, a 52-week high, as more than 1.5 million shares
traded, 30 times the three-month daily average.
Los Angeles-based Las Vegas Entertainment's financial
condition makes it an unlikely suitor for a company that earned
$4.6 million in its last fiscal year. Las Vegas Entertainment
lost $47.5 million since it was founded in 1990, including $5.28
million in the first nine months of fiscal 1999.
As of July 31, it had $177,619 in the bank, with monthly
expenses of $50,000 to $75,000. Current liabilities of $792,066
exceeded current assets of $197,596, according to SEC documents.
The company warned on Sept. 24 that its continuing losses
''raise substantial doubt about the company's ability to continue
as a going concern.''
Las Vegas Entertainment told the SEC it would finance the
Jackpot acquisition with $190 million it expects to receive from
an agreement to sell 12.2 million shares at $15.58 each to Fred
Cruz, president of Countryland Wellness Resorts Inc. in Las
Vegas. Cruz, whose company is based in his eight-room home,
wasn't immediately available for comment.
Financial Backing
It said Cruz's commitment is backed by a $400 million
guarantee from an Arizona company, U.S. Guarantee Corp. That
company was dissolved on March 19 after it issued a bad check,
said David Adams, an attorney with the Arizona Securities
Division.
U.S. Guarantee still maintains a Web site, which states that
its mission is to ''administer aid on a worldwide scale to any
group in need of assistance.''
Telephone messages left for Las Vegas Entertainment
executives weren't returned.
Jackpot said its board would study the offer. The Las Vegas-
based company operates about 4,000 gambling machines in Nevada
and had sales of $95.7 million in fiscal 1999. Jackpot said last
month it would hire an investment banker to evaluate its
alternatives.
--David Evans in Los Angeles (310) 827-2348 with reporting by
James Mosher in the Princeton newsroom (609) 279-4131/shf/jh
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