Pinnacle creates new nationwide casino network in $1.45 billion buyout

Wednesday, 08 May, 2006 0

Pinnacle Entertainment created a nationwide casino network in most of the US’s biggest gambling markets by finally agreeing to acquire smaller rival Aztar for about $1.45 billion.

The combined company will have casinos in Nevada, New Jersey, Louisiana, Missouri and Indiana. In addition to new development projects, the company will operate a dozen gambling properties in the US, as well as 8,800 hotel rooms. The company will operate about 22,000 slot machines.

“This transaction will enable Pinnacle to further broaden and diversity its geographic presence and cash flows,” said Pinnacle CEO Daniel Lee in a statement.

“We intend to create a nationwide casino network not unlike that of some of our larger competitors.”

The acquisition also allows Pinnacle to develop Aztar’s Tropicana Las Vegas site.

Pinnacle owns and operates casinos in Nevada, Louisiana, Indiana and Argentina, as well as a hotel in Missouri, among other assets. Aztar owns five casinos in New Jersey, Nevada, Missouri and Indiana.

Pinnacle outbid three rivals that included Ameristar and Columbia Sussex.

The bidding wars went on for two months, partly because of the valuable Tropicana, which sits on a prime site likely to be developed, according to news accounts.

Aztar is based in Phoenix, while Pinnacle is a Las Vegas headquartered company. Pinnacle, however, did not previously have a casino in that city. Two of its recent casino projects are in St. Louis.

The deal also gives Pinnacle its first property in the growing Atlantic City area, where it previously had no presence.

“One of Pinnacle’s assets is Chief Executive Dan Lee, former chief financial officer of Steve Wynn’s Mirage Resorts,” said In Business Las Vegas. “Even if Lee didn’t develop the Bellagio himself, he was part of the team that did and got to watch the master at work.”

The boards of both Pinnacle and Aztar this week unanimously approved the deal, which is expected to close by year-end.

Report by David Wilkening

David

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