Casino Operators to Merge (ASCA, PNK)
Casino operators Pinnacle Entertainment Inc. (NYSE: PNK) and Ameristar Casinos Inc. (NASDAQ: ASCA) announced this morning that the two companies have signed a definitive agreement under which Pinnacle will acquire all the outstanding shares of Ameristar for $26.50 a share in cash. The deal includes the assumption by Pinnacle of $1.9 billion in Ameristar debt and $116 million in Ameristar's cash holdings.
The acquisition price represents a 45% premium to Ameristar's average closing price for the 90 days ended yesterday. Pinnacle expects the deal to close by the end of the third quarter of 2013, pending approval from Ameristar shareholders and regulatory agencies.
Ameristar's owns eight casinos in the six states, including one in Jackpot, Nevada, while Pinnacle owns seven casinos in three states and a racetrack in Ohio. Pinnacle is also a partner in developing the first casino in Vietnam.
Pinnacle's CEO 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, as well as an opportunity to drive property margin expansion by applying best practices garnered from both Pinnacle and Ameristar across the combined enterprise.
Shares of Ameristar are up 19.9% this morning, at $26.40 after posting a new 52-week high of $26.59 earlier. The prior 52-week range was $15.04 to $23.47.
Pinnacle's shares are up 13.7% at $15.18 after putting up a new 52-week high of $15.40 earlier. The prior range was $8.89 to $13.73.
Filed under: 24/7 Wall St. Wire, Casinos, Mergers & Acquisitions Tagged: ASCA, PNK