If the Aztar board deems Columbia Sussex's bid superior, Pinnacle has 72 hours to match or better the offer. If Pinnacle does not match or better the offer in Aztar's determination, it would have to pay Pinnacle $78 million to kill its deal with Pinnacle, The kill fee includes a $52.2-million break-up fee and another $25.8 million for legal expenses. Prior to this latest amendment to the deal, the total kill fee for the deal was $66 million.

Since March 13, when Pinnacle and Aztar agreed to a merger at $38-per-share, there have been no less than 15 bids. Columbia's latest bid is just under 40% higher than the original bid.

Prior to Columbia's $53 all-cash bid, JP Morgan stated in an opinion that Pinnacle's bid should be deemed superior because "a merger with a strategic sponsor such as PNK would not only be good for AZR shareholders, in our view, but also good for other stakeholders in the company such as employees."

The latest opinions from analysts say Pinnacle should take its $78-million break-up fee and walk away. Pinnacle could explore casino purchases on the Strip, and the company is spending $800 million to build two casinos in St. Louis, according to analysts. The Sahara hotel-casino, for example, is supposedly being marketed by CB Richard Ellis.

Aztar's most sought after possession is the 34-acre Tropicana resort here, which is viewed as one of the last big redevelopment opportunities on the Las Vegas Strip. The property is located at Las Vegas Boulevard and Tropicana Avenue. The aging resort is surrounded by the MGM Grand, Excalibur, Luxor, Monte Carlo and New York-New York mega-resorts.

In its most recent annual report, the company said it planned to raze the Tropicana, develop a billion-dollar resort on the north half of the site and sell the remainder into a joint venture. As tentatively envisioned, the north site would hold 2,725 hotel rooms and suites; 200,000 sf of dining, entertainment and retail facilities; a 100,000-sf casino; a 3,800-car parking garage; and a four-acre rooftop pool recreation deck overlooking the Strip.

In addition to the Tropicana Las Vegas, Aztar also owns the Tropicana in Atlantic City, which showed strong growth in 2005. All told, it owns seven casinos in six markets.

Pinnacle does not have any casinos in Las Vegas or Atlantic City. Rather, it offers casinos and gaming resorts in Indiana, Mississippi, Louisiana, Missouri and Argentina.

Columbia Sussex owns and operates several casinos, including four in Nevada. The four Nevada casinos are Caesars Tahoe and the Horizon in Lake Tahoe, River Palms in Laughlin and the off-Strip Westin.

For previous GlobeSt.com articles on the bidding ware for Aztar, click on one of the following links:

Instant Insights /

Pinnacle, Columbia Waiting on Aztar

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