After two months of bidding that raised the value of Aztar Corporation (AZR) by more than $600 million, investors appeared to be waiting on the sidelines Monday wondering whether an even higher offer was forthcoming.
Pinnacle Entertainment Inc. (PNK) also was left to wonder over the weekend whether the company’s $51 per share bid that was topped by a $53 per share offer from an affiliate of Columbia Sussex LLC would carry greater weight. The latter’s offer actually was $51 per share plus $2 to be applied toward the breakup fee.
For the first time, Wall Street took the latest offer in stride and actually watched the AZR share price decline a bit from its high of $51.59 to Monday’s trading of $51.31 per share. In the past few weeks, as the bids increased, investors pushed the Aztar share price to numbers that were higher than the bids, anticipating that one of the acquiring companies would bid higher.
Pinnacle Entertainment started the acquisition process during the second week of March with an offer of $38 per share and the added benefit of taking over Aztar’s debt of nearly $700 million. Wasting no time, Aztar directors accepted the bid, agreeing to a breakup fee of up to $60 million, including expenses.
Colony Capital LLC joined in the bidding activity, as did Ameristar Casinos Inc. (ASCA) but they soon backed out, leaving the battle to Pinnacle and Columbia Sussex.
The latest Columbia Sussex bid is valid through Wednesday at 11 a.m. EDT.
This isn’t the first time that Pinnacle Entertainment and Columbia Sussex have tangled over an acquisition. Last year, the two companies fought over a riverboat in Missouri. The battle was won by Columbia Sussex but the acquisition never materialized when it was suggested that the company would have trouble receiving a license from Missouri gaming regulators.
The same argument arose during these negotiations, suggesting that Columbia Sussex would not be able to close on its proposed acquisition because of regulatory, or possibly financial, concerns. In order to remove that possibility, Columbia Sussex said its $53 per share bid was accompanied by a $300 million good faith deposit that would be forfeited should it fail to close on the purchase by year end.
In the amended agreement with Aztar that accompanied its $51 per share bid ($47 in cash and $4 in stock), Pinnacle was able to get its breakup fee and expenses pushed up to some $80 million. The breakup sum has been seen as having a $1 per share value to Pinnacle Entertainment shareholders.
Rhode Island lawmakers appeared reluctant to support a proposal made by Harrah’s Entertainment Inc. (HET) for a constitutional amendment that would permit the construction of an Indian casino in West Warwick.
In a survey conducted by the Providence Journal last week, only five of the 17 members of the House Finance Committee that were interviewed supported the plan. Two other committee members were not available for comment.
Among the objections some members raised was Harrah’s refusal to reveal the details of its tribal contract. When one committee member asked a Harrah’s official to see the contract, he was told, "We have a private contract."
Also, another committee member said he felt that if a casino were allowed the license should be put out to bid. "I believe the state would get a better deal that way," he said.
Las Vegas-based Gaming Partners International Corporation (GPIC) has signed a contract with Wynn Macau for a supply of gaming chips and plaques fitted with the company RFID technology.
"Manufactured by GPI’s plan in France," the company said in a statement, the microchips are from the new "S2" range of hard plastic-compound, injection-molded chips.
"We are very excited that Wynn Resorts supports us on both sides of the planet: at Wynn Las Vegas with 125 KHz RFID chips and at Wynn Macau with 13.56 MHz. Each technology has different although complementary features to cater for the specific requirements of each market," the company said.
THE INSIDER: Ameristar Casinos Inc. (ASCA) announced Monday that its board of directors had declared a quarterly cash dividend of $0.09375 per share payable on June 15 to stockholders of record as of May 30.
Las Vegas Sands Corp. (LVS) says it has signed contracts for five multi-year trade shows that combined represent 13 separate events for its facilities in Macau.
Progressive Gaming International Corporation (PGIC) has indicated that it may require until the first week of June to file its quarterly report on Form 10-Q for the period covering the first fiscal quarter that ended on March 31.
Cash Systems Inc. (CKNN) says it has received a multi-year contract renewal from Delaware Park for its check cashing, ATM and cash advance services.
Atlantic City casino winnings during the month of April were up 4%, according to state officials. Casino gambling winnings reached $440.2 million during April, bringing its four month total to $1.68 billion.
GTECH Holdings Corporation (GTK) announced it has received a three-year contract extension from the Beijing Welfare Lottery Center in China.
MGM MIRAGE Inc. (MGM) says Anthony Mandekic has joined the company’s board of directors. He serves as secretary/treasurer of Tracinda Corporation, the company owned by Kirk Kerkorian, MGM’s largest single stockholder.
William Pfund has joined WMS Industries Inc. (WMS) as vice president of investor relations.