The casino owner and operator said it intends to use the proceeds primarily to repay all of the outstanding term loans under its credit agreement and to purchase $25 million of its 8.25% senior subordinated notes due 2012. The Company expects to use some or all of the remaining proceeds for one or more of its capital projects.
In January, Pinnacle completed a 10-million-share public offering at $32 per share, generating $368 million in gross proceeds. At the time, Pinnacle said it would use the net proceeds in part to continue expanding its existing facilities and to complete several ongoing new development projects. The company is currently working on projects in St. Louis, Sugarcane Bay and Atlantic City.
At Pinnacle's construction site in Downtown St. Louis, a new casino resort is under construction. The $430-million project, called Lumiere Place, is scheduled to open in the second half of 2007. In addition, site work also is underway for River City, Pinnacle's $375 million casino project in south St. Louis County.
In November, lenders agreed to boost Pinnacle Entertainment's credit facility to $1 billion from $750 million to facilitate its acquisition of the Sands casino and former Traymore hotel sites in Atlantic City, which closed in November. The contiguous properties were acquired from an affiliate of billionaire financier Carl Icahn's American Real Estate Holdings LP for about $250 million. The Sands Casino has been closed and will be torn down and replaced.
Shares of Pinnacle on Wednesday stood at $29.88 in afternoon trading, off $0.88 on a down day for many public gaming companies. The company's share price is right in the middle of its trading range over the past 52 weeks, which have seen the company's shares trading as high as $37.40 and as low as $23.69 (Aug. 14, 2006).
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