Will Pinnacle’s $51 bid end the battle for Aztar?

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Weeks of playing “can you
top this” by four gaming companies appear to have resolved the issue of
which firm will acquire the casino and real estate properties owned by Aztar
Corp. (AZR).

After being told that its $51 per
share offer had provided Aztar management with too little time to consider,
Pinnacle Entertainment Inc. (PNK) resubmitted its proposal which was quickly
accepted.

The $51 bid, consisting of $47 in
cash and $4 in stock, and totaling $2.58 billion including $677 million in debt,
barely topped the previously “superior” bid given Aztar by Wimar Tahoe
Corp., a privately held company that does business as Columbia Entertainment,
the gaming arm of Columbia Sussex LLC of Fort Mitchell, Ky.

Columbia Sussex was told on
Friday morning by Aztar that its all cash $50 per share bid was superior to the
most recent offer of Pinnacle. However, Dan Lee, chairman and CEO of Pinnacle,
had decided to reject some $66 million in breakup fees in order to make another
pitch for the company.

The Columbia Sussex bid had a
deadline of 5 p.m. on Friday.

The effort to acquire Aztar’s
gaming properties and the 34 acres it owns on the south end of the Las Vegas
Strip began several weeks ago when Pinnacle made the initial foray with a $38
per share bid.

Colony Capital LLC, owner of the
Las Vegas Hilton and several other casinos throughout the country, joined the
bidding war with a $42 per share bid and was followed by Ameristar Casinos Inc.
(ASCA) with an offer that was slightly higher.

At the time, it was believed that
Ameristar would discuss the possibility of a joint offer with the other two
bidders, but Pinnacle responded by pushing its bid up to $45.

Then it was Columbia Sussex’s
turn to join the bidding wars. The company increased the offer to $47 per share.
And through it all, AZR investors kept pushing up the trading price of the stock
until it hit $50 per share last week. But, Lee wouldn’t give up, increasing
his offer to $48.

In making its $51 per share
offer, Pinnacle said it had arranged for the necessary financing to cover its
bid. The agreement with Aztar provides that if the deal falls through Pinnacle
will be paid $52.16 million as a breakup fee and up to $25.84 million for
expenses.

On Monday noon, Aztar notified
the Securities and Exchange Commission that it had amended its merger agreement
with Pinnacle.

When Pinnacle made its initial
announcement regarding the takeover, the company indicated that the Las Vegas
Tropicana would be operated in its current condition for the next two years
while plans for its future are reviewed. This announcement was cheered by the
current employees.

Pompano expansion

Pompano Park, for years the
winter haven for Standardbred horses who participated in harness racing, will be
expanded in a $140 million project announced by its owner Isle of Capri Casinos,
Inc. (ISLE).

The new development will provide
space for 1,500 slot machines, a poker room and four restaurants.

The heart of the casino, the
company said, will include a multi-story area with a number of video displays.

According to the plan, the
company hopes to open the racino within the next seven to nine months.

Internet woes

Things were looking up for
Canterbury Park (ECP) in Shakopee, Minn., a few years ago when track management
was able to boost purses with the additional revenue of a recently installed
card club.

But, the prosperous period did
not last long. Canterbury President Randy Sampson blames Internet wagering.

“As some of the core
simulcast players decide to stay home and play (the horses) on the Internet, we
have to find ways to develop new players,” he explained, adding that
“live racing is the way to grow (the business).”

The track doesn’t have much of
a choice. Minnesota has rejected track efforts to allow slot machines at the
track, a move officials said would permit the track to return to a higher purse
level.

THE INSIDER: Hilton Hotels
Corporation (HLT) has completed its acquisition of the U.K.’s Hilton Group
Plc, thus leaving the latter’s Ladbroke gaming division to pursue expanded
gaming opportunities.

Italian lottery operator
Lottomatica has wrapped up a $2.76 billion credit facility agreement with a
syndicate of banks in order to complete its acquisition of GTECH Holdings Corp.
(GTK).

Analysts at Bear Stearns have
upgraded the shares of Wynn Resorts Ltd. (WYNN) and downgraded the shares of
Shuffle Master Inc. (SHFL).

Cash Systems Inc. (CKNN) reported
that Gordon Graves will leave the company’s board of directors effective June
20.

Progressive Gaming International
Corporation (PGIC) says it has received approval from the Nevada Gaming Control
Board for the use of Ticket In/ Ticket Out for its stand alone Matrix slot
games.

Geoffrey Davis, chief gaming
analyst for Citigroup, has downgraded the shares of Bally Technologies Inc.
(BYI) to sell from hold.

Scientific Games Corporation
(SGMS) announced it has been notified by the New Hampshire Lottery that it has
been awarded a contract to supply instant tickets and related services.

A plan by Delaware North Cos. to
create a slots casino at Seven Springs Mountain Resort in Pennsylvania has been
enthusiastically supported by the residents of Somerset.

Background checks by the
Pennsylvania State Police is going so slowly that officials are concerned the
delays could prevent the state from issuing licenses in June so that slot
operations could begin in September.

A grassroots effort to bring a
casino to the economically-plagued Rumford, Maine, area has been started by a
Web site group identified as Evergreen Mountain Enterprises. The paper mill town
has been hit by a recent series of business closings.

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