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Bidding War Intensifies for Casino Owner Aztar

April 29, 2006|From Bloomberg News

LAS VEGAS — Casino operator Aztar Corp. said Friday that Columbia Sussex Corp. had boosted its bid to $1.79 billion, stepping up the four-way contest for the operator of the Tropicana casinos in Las Vegas and Atlantic City, N.J.

Columbia Sussex offered $50 a share in cash, Phoenix-based Aztar said. The bid followed a $48-a-share cash-and-stock offer earlier in the day from Pinnacle Entertainment Inc. Pinnacle valued its bid at $1.85 billion including preferred shares and stock options.

Aztar said that the Columbia Sussex bid might be superior to the Pinnacle offer but that the board was not making any recommendation now. Four companies including Ameristar Casinos Inc. and Colony Capital are vying to win Aztar because it controls the last piece of land on the Las Vegas Strip that can be developed into a casino resort. The 34-acre site is home to Aztar's Tropicana hotel and casino.

The purchase of Aztar would transform any of the suitors from small, regional operators into larger players in the two biggest gaming markets in the U.S. Pinnacle doesn't own a property in Las Vegas. Columbia owns the Westin Casuarina in Las Vegas.

"They're trying to get the best possible price for shareholders," said James McBride, vice president of Overland Park, Kan.-based Trendstar Advisors, which holds 197,000 Aztar shares.

The Pinnacle offer includes $45 a share in cash and $3 a share in Pinnacle common stock, Las Vegas-based Pinnacle said in a statement. It also includes $507.67 a share in cash and Pinnacle stock for each preferred share and $677 million in debt.

Columbia operates riverboat casinos in Louisiana, hotel-casinos in Lake Tahoe and casinos in Mississippi. It also owns 83 hotels.

Pinnacle operates mainly in the Midwest.

Shares of Aztar rose 51 cents to $47.50. Shares of Pinnacle fell $1.60 to $27.30.

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