Aztar said in its own announcement this morning that its board of director held a meeting this morning at 10 a.m. EDT and confirmed the superior nature of the Wimar Tahoe bid to Pinnacle's existing $48-per-share merger agreement. The announcement acknowledges Pinnacle's revised offer but does not comment on it other than to say it told Pinnacle yesterday evening that its 11 p.m. deadline provided insufficient time to evaluate the revised offer. An Aztar spokesman this morning declined to comment on whether the Board made any determination regarding Pinnacle's revised offer during the meeting, or if the company plans to terminate its lower-priced merger agreement with Pinnacle in order to enter into one with Wimar Tahoe Corp.One week ago, Aztar determined that a $50-per-share offer by Wimar Tahoe Corp., an affiliate of Kentucky-based Columbia-Sussex Corp. was superior to three offers, including those of Pinnacle and another Vegas-based company, Ameristar Casinos Inc. Shortly thereafter, Ameristar backed out, leaving Pinnacle, which has a signed merger agreement with Aztar, to decide whether to take another stab at landing the deal.
It did, responding by 4 p.m. PDT with a $51-per-share offer that gave Aztar until 11 p.m. to respond. For whatever reason, Aztar did not respond. As a result, Aztar must now transfer $66 million to Pinnacle's bank account before it can officially terminate the deal, if that's what it wants to do. Regardless, it can't now accept Pinnacle's higher offer unless Pinnacle offers it again, according to Friday morning opinion released by JP Morgan.
"For one reason or another AZR was unable to respond ...," states the bulletin. "This is somewhat curious in our view since AZR's lone duty is to evaluate any and all potentially superior bids. Nevertheless, it is our belief that AZR will have to eventually respond to PNK's intent to submit a potentially superior bid. The bigger question may now be whether PNK will offer it again."
Pinnacle's bid is composed of $47 per share of cash and $4 per share in stock. "Though Columbia Sussex's $50/share bid is all cash, we believe PNK's bid could still 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," states the JP Morgan bulletin.
Aztar's prize 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. 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.
For previous GlobeSt.com articles on the bidding ware for Aztar, click on one of the following links:
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