Ameristar Backs Out, Pinnacle On Deadline for Aztar

Ameristar's latest bid, $47 per share, was considered by Aztar to be superior to Pinnacle's $48 bid because it was all cash and Pinnacle's was not. However, Wimar Tahoe Corp., the Columbia-Sussex affiliate, on Friday offered $50 per share, which Aztar determined on Friday was superior to both offers.

Per its merger agreement, Pinnacle has until today to match the Wimar Tahoe offer. If it does not, Pinnacle chief Executive Daniel Lee told analysts and reporters on Tuesday that Aztar must pay Pinnacle a hefty kill fee before hooking up with Wimar Tahoe Corp. "If we choose not to respond, we will have $66 million in the bank account on Friday," said Lee.

Pinnacle originally bid $38 per share for Aztar back in March. The current offer would pay Aztar holders $45 per share in cash and $3 per share of its common stock, and assume $677 million in debt. The total deal value is $2.46 billion.

Aztar's Tropicana Las Vegas 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. Aztar's master plan for further development of the property calls for the creation of two separate but equal and interconnected sites.

"We would develop the north site and we would hold the south site for our future development, joint venture development, or sale for development by another party," states its most recent annual report. A completed design for the north site calls for 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. 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.