Dan Lee, chairman and CEO of Pinnacle Entertainment Inc. (PNK), was faced with a decision on Monday morning: Should he continue his attempt to outbid others in his quest for Aztar Corporation (AZR), or should he fold his hand and pocket about $65 million in a breakup fee.
Lee pushed the envelope on Friday by increasing his total bid to $48 per share, consisting of $45 in cash and $3 in stock.
But within hours, Aztar announced that Wimar Tahoe Corp, an affiliate of Columbia Sussex Corp., has raised its offer to $50 a share, to be paid in cash. The bid values Aztar at $2.5 billion since Columbia Sussex also agreed to assume $677 million in debt.
Still to be heard from were the two other bidders for Aztar, Ameristar, whose highest bid was $47 per share in cash, and Colony Capital, the company that appeared to drop out of the bidding after its initial offer.
Pinnacle began its quest for the company that owns the Tropicana Hotel/Casino and its 34-acre plot of real estate on the Las Vegas Strip a few weeks ago with a modest $38 per share.
Almost immediately, Tom Barrack’s Colony Capital LLC, upped the offer to $42 per share, a move that was quickly followed by Craig Nielsen, founder and largest shareholder in Ameristar Casinos Inc. (ASCA), who matched the $42 offer.
Looking to make an immediate impression, Columbia Sussex boosted the bidding to $47 a share, although some analysts felt Aztar might express concern about the Midwest company since it might have trouble getting licenses in Missouri.
However, during the weekend, Aztar pointed out that the Columbia Sussex made a definitive offer that included a signed merger agreement, financial commitment letters and a substantial deposit that would be retained by Aztar should Columbia Sussex fail to obtain regulatory approvals.
Columbia Sussex, a privately-held company, already conducts gaming activities in Nevada, Louisiana and Mississippi. The company also operates more than 100 hotels under a variety of brand names.
In announcing the bids, Aztar officials said they felt the $50 per share cash offer from Columbia Sussex "is reasonably likely to result in a superior proposal."
IGT sues Bally
International Game Technology (IGT) announced Monday it had filed suit against Bally Technologies Inc. (BYI) alleging a violation of its patents.
The lawsuit alleges Bally’s Power Bonusing technology, recently installed in Nevada casinos as well as gaming establishments on the East Coast, "infringes at least nine U.S. patents held by IGT."
Also, the lawsuit alleges that the patent infringement has been carried out "with full knowledge of the patents and IGT’s rights."
In 2004, IGT sued Bally for infringing six patents including patents relating to IGT’s highly successful bonus wheel gaming machines. An infringing patent lawsuit relating to multi-hand poker games such as IGT’s Triple Play Poker gaming machines resulted in Bally paying damages of more than $7.3 million.
There is a new bidder for the second gaming/development license to be awarded in Singapore. Starwood Hotels & Resorts (HOT) and Isle of Capri Casinos Inc. (ISLE) said they will join the consortium led by noted resorts developer Mark Advent.
The second license will be awarded for the resort island of Sentosa. The winning bidder will have to pay Singapore $382.2 million for the 121-acre site.
Contenders for the Sentosa casino include the consortium led by Kerzner International Ltd. and CapitalLand Ltd.; the partnership of Harrah’s Entertainment Inc. (HET) and Keppel Land Ltd., and a team led by Genting International Plc that includes Universal Studios.
THE INSIDER: Called the gaming industry’s No. 2 convention, the Southern Gaming Summit opens this week in Tunica, Miss., with Gov. Haley Barbour addressing the group on Thursday.
A committee hearing has been set for this week during which Harrah’s and its partner, Narragansett Indian Tribe, will know whether their efforts to get a constitutional amendment on the Rhode Island November ballot will materialize.
Analysts at Bear Stearns have initiated coverage of Penn National Gaming Inc. (PENN) with an outperform rating.
A ban on the controversial gaming machines TouchPlay will go into effect on Thursday in Iowa after a federal judge denied a request to postpone the state’s action in prohibiting use of the machines.
The community of Limerick Township in Pennsylvania delivered a blow to the plans of Boyd Gaming Corp. (BYD) to seek a casino license for that community by adopting a position opposing a slots parlor.
Trump Entertainment Resorts Inc. (TRMP) will release its quarterly earnings on Wednesday, May 3 at 11 a.m. EDT. On Thursday, Scientific Games Corporation will review the company’s quarterly financial performance in a conference call at 5:30 a.m. PDT.
Mississippi gaming regulators have approved a plan offered by the Mashantucket Pequot Tribal Nation, operators of Foxwoods Casino in Connecticut, for a $400 million casino resort at the site of the Broadwater Hotel in Biloxi.