Pinnacle Entertainment to buy Ameristar Casinos

December 21st, 20120 Comments »

Pinnacle to buy Ameristar Casinos

Pinnacle Entertainment Acquires Ameristar Casinos. Photo is of Boomtown New Orleans.

Boomtown New Orleans (Photo: Pinnacle Entertainment)

If approved by shareholders, a new acquisition is on the way.  Las Vegas’ Pinnacle entertainment to buy Ameristar Casinos in an $869 million dollar deal.

The deal would call for Pinnacle to also take on 1.9 Billion in debt from Ameristar.

Pinnacle, which has already obtained a commitment on financing from Goldman Sachs and J.P. Morgan, expects the deal to close by the end of 2013’s third quarter.

Just last month Pinnacle suffered a slump in their stock prices when they announced they were experiencing problems and potential delays with a Vietnamese gaming resort in which it is investing.

What a difference a month can make.

Pinnacle currently owns seven casinos in Louisiana, Missouri and Indiana and a racetrack in Ohio. Through the acquisition, Pinnacle would acquire Ameristar’s properties in Missouri, Iowa, Colorado, Mississippi, Indiana and Northern Nevada and the acquisition would effectively more than double Pinnacle’s footprint, bringing the total to 17.

Pinnacle CEO Anthony Sanfilippo said

We believe the transaction represents a uniquely attractive opportunity for Pinnacle and its shareholders given the significantly improved geographic and operational diversification of the combined portfolios. In addition, we believe there is considerable opportunity to expand reach and generate synergies and efficiencies of scale from the
increased size of the combined company.

Stifel Nicolaus Capital Markets gaming analyst, Steven Wieczynski, thought it made sense for Pinnacle Entertainment to buy Ameristar Casinos and said,

Given the limited overlap of properties between Pinnacle and Ameristar, on paper, this deal makes total sense.

The terms of the deal call for Pinnacle  to pay $26.50 for each share of Ameristar, which is  20 percent more than the company’s closing price on Thursday.

Even with assuming the nearly $2 billion in debt, Pinnacle said the total enterprise value of Ameristar is $2.8 billion.

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About Chellie Cervone

A Las Vegas "native" by way of New York, I'm a professional blogger who favors all things Las Vegas and offers a unique, witty and sometimes controversial perspective. You can count on me to tell it like it is. Please visit my other sites Las Vegas World News and Celebrity Feast Connect with me on Google+ Chellies World on Google+

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