Pinnacle Adds Aztar in $2B Deal

PHOENIX-A ripple swept through the gaming industry earlier this week with Las Vegas-based Pinnacle Entertainment Inc.’s acquisition of local outfit Aztar Corp. According to Pinnacle officials, the firm will invest $2.1 billion in taking over Aztar.Details of the deal call for Pinnacle to acquire all outstanding shares of Aztar for $38, or roughly 24% over Aztar’s closing stock price on March 10. Pinnacle will pay $1.45 billion of equity and pick up another $723 million in debt.As part of the deal, Aztar will close its corporate headquarters in Phoenix. It is unclear whether the local employees will be retained or relocated in the merger.While growth and increasing market share were enticing for Pinnacle, the potential of one of the major properties on Aztar’s ledger, the Las Vegas Tropicana, piqued the firm’s interest. With a 34-acre site along the Las Vegas strip, the Tropicana offers a multibillion-dollar redevelopment opportunity for Pinnacle. The firm is set to begin its push on updating and rethinking the famed site within the next two years.Although officials from Pinnacle and Aztar were not available for comment, Daniel R. Lee, Pinnacle’s chairman and CEO, said in a prepared statement that the “transaction will enable Pinnacle to further broaden and diversify its geographic presence and cash flows as well as generate cross-marketing synergies.”The merger will allow Pinnacle to grow from the 10th largest US casino operator to become the nation’s sixth largest. With various projects already in the pipeline, the new firm could soon reach the fourth spot among casino operators, according to Lee.”We intend to create a nationwide casino network, not unlike that of some of our larger competitors,” Lee said. The acquisition gives Pinnacle a strong presence in Nevada, New Jersey, Louisiana, Missouri and Indiana. Including projects in the works, the firm will count 12 gaming properties, more than 8,800 hotel rooms and roughly 22,000 slot machines.