Veteran gaming executive Dan Lee was named CEO of regional casino operator Full House Resorts Monday, ending a two-month proxy fight for control of the Las Vegas-based company.
Lee, 58, who led an investor group that controlled 6.2 percent of Full House shares, wanted to increase the size of the board and direction of the company that operates three casinos and manages a fourth.
Full House said CEO and Chairman Andre Hilliou will step down and the board will almost double to nine members.
“When I got involved, I understood that shareholders were looking for a change in direction,” Lee said Monday.
Lee’s group received Securities and Exchange Commission permission in October to approach other company stockholders about a special meeting to vote on a board restructuring.
Lee, who spent seven years as CEO of Pinnacle Entertainment and nearly a decade as the chief financial officer for Steve Wynn’s Mirage Resorts, took over following discussions with Full House board member Carl Braunlich, the company’s lead director. Braunlich is an associate professor at UNLV’s William F. Harrah College of Hotel Administration.
Full House Chief Operating Officer Mark Miller resigned along with Hilliou, giving the company six open board seats. Those seats will be filled by Lee and investors Craig Thomas and Bradley Tirpak, who were seeking the changes to Full House.
Also named to the board were W.H. Baird Garrett, Raymond Hemmig, and former Boyd Gaming Corp. CEO Ellis Landau. Current Full House board members Braunlich, Ken Adams and Kathleen Marshall will remain on the board.
Full House owns three casinos: one in Indiana, one in Mississippi and the Stockman’s Casino in Fallon. The company also manages the Grand Lodge Casino at Hyatt Regency Lake Tahoe under a lease agreement. In September, the company’s management contract for an Indian casino in New Mexico ended.
Lee said the company reminds him of Pinnacle when he took over in 2002. He was traveling Monday to the company’s Rising Star Casino in Indiana. Full House employs 2,500 workers between its hotel-casinos and the corporate office.
“We need to figure out what needs to be done to improve the company,” Lee said.
Full House is part of two investment groups bidding on two casino projects in upstate New York. Full House would operate the casinos under a management agreement.
Full House’s board put the company up for sale in October. In a statement, the company said it would continue to explore strategic alternatives.
A trust set up by the company’s late CEO that owns 9.4 percent of Full House had sided with Lee’s shareholder group.
The proxy fight didn’t drawn much interest from analysts.
In SEC filings, the group said the company “has failed stockholders” and needs to replace its board and management team.
Lee’s group had criticized the company’s management and cited a 59 percent drop in the company’s stock price. It also said executives were overcompensated and highlighted the failed acquisition of a casino in Tunica, Miss.
Full House, Lee said, had zero debt two years ago and now in default on its debt covenants for a portion of the company’s $65 million in debt.
Shares of Full House, traded on the Nasdaq, rose 20 cents, or 16 percent, on Monday to close at $1.45.
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