Ameristar Casino dealt to new owner in $869 million deal

2012-12-21T20:15:00Z 2012-12-22T10:44:03Z Ameristar Casino dealt to new owner in $869 million dealKeith Benman keith.benman@nwi.com, (219) 933-3326 nwitimes.com
December 21, 2012 8:15 pm  • 

LAS VEGAS | East Chicago's Ameristar Casino will be getting a new owner, with Pinnacle Entertainment announcing Friday it will buy buy rival Ameristar Casinos for $869 million, plus take on $1.9 billion in debt.

The complex deal will add eight casinos to Pinnacle's existing portfolio of eight gaming establishments. It is expected to close by the end of the third quarter of 2013, according to Pinnacle.

During the intervening time, it will be "business as usual" at Ameristar East Chicago, said Ameristar spokeswoman Roxanne Kincaid.

Pinnacle CEO Anthony Sanfilippo, during a morning conference call with Wall Street analysts, said Pinnacle will stay with current branding for the casinos it acquires for "at least the foreseeable future." That means the Ameristar name should stay on the East Chicago casino for at least awhile.

"We will focus on a sensible integration of these two companies," Sanfilippo said.

Pinnacle executives on the call also said the new casinos their company will acquire in St. Louis and Indiana will give it new geographical reach in the Midwest, and specifically mentioned Chicago.

Pinnacle also owns Belterra Casino Resort, in downstate Florence, Ind., and would become the third-largest casino player in the state with the purchase, said Ed Feigenbaum, editor of Indiana Gaming Insight. The deal will require the approval of the Indiana Gaming Commission, a task that should be made easier by the fact Pinnacle already operates a casino in Indiana, Feigenbaum said.

With Ameristar's recent improvements to the East Chicago hotel and casino, as well as its steady revenues in the range of $18 million to $22 million per month, there is little chance Pinnacle would consider a closure in East Chicago, Feigenbaum said.

Pinnacle's marketing strategies are a "little more aggressive and progressive" than is generally seen in Northwest Indiana, and those changes will probably be noticed once Pinnacle takes over, Feigenbaum said.

"I think it will be a breath of fresh air, a little different approach than what you see in other casinos up there," Feigenbaum said.

U.S. casinos have struggled to recover from the recession as consumers watch spending. That has been especially true of casinos in Indiana, which also are facing up to competition from new casinos in neighboring states.

Ameristar's East Chicago casino has had to struggle with the closure of the Cline Avenue bridge for the past three years. The bridge was one of the gateways from Chicago to the casino, and patrons coming from that direction must now take detours.

If the deal announced Friday is approved by shareholders and regulators, Pinnacle will pay $26.50 for each share of Ameristar Casinos Inc. That's a 20 percent premium over the company's Thursday closing stock price of $22.07. It's also gaining $116 million of the company's cash.

Ameristar shares jumped 17 percent to $25.75 on the news, while Pinnacle shares rose 3 percent to $13.80.

The Associated Press contributed to this story.

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