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Station Casinos Reviewing Buy-Out Offer

LAS VEGAS-A group led by company chairman and CEO Frank Fertitta offers to acquire all of the casino operator's outstanding stock for $82 per share in cash, or about $4.7 billion.

By Brian K. Miller | Updated on December 04, 2006

LAS VEGAS-Station Casinos Inc. chairman and CEO Frank Fertitta and partners on Monday morning offered to buy all outstanding shares of the locally headquartered public company for $82 a piece, or about $4.7 billion. The offer is an 18.66% premium to where the share price stood at the end of trading Friday. In early afternoon trading Monday, shares stood at a new 52-week high of $83.98, up 21.53% on the day.

Fertitta’s investor group, Fertitta Colony Partners LLC, is a newly formed entity that includes the investment firm Colony Capital and Fertitta’s brother, Lorenzo, who is president of Station Casinos. In its proposal letter, the group said that it has received sufficient financing commitments to complete the acquisition. Station Casinos, which runs in the locals’ casino market, said it received the bid on Saturday and has established a special committee of independent directors to review the bid and any other alternatives.

JP Morgan Securities’ Gaming Analyst Harry Curtis said in a client note Monday morning that the buy-out price could eventually reach into the mid- to high $80s, either from Fertitta’s group or a competing one. “Other buyers may be more willing to part with more of the land portfolio that STN has amassed over time” to offset a higher bid.

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