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Isle of Capri seeks to buy Caruthersville's Casino Aztar

Tuesday, March 20, 2007

ST. LOUIS -- Isle of Capri Casinos Inc. said Monday it has agreed to buy Casino Aztar in Southeast Missouri for about $45 million from an affiliate of Kentucky-based Columbia Sussex Corp.

The deal still needs to be approved, but the development could be welcome news for the Missouri Bootheel town of Caruthersville, which was hard hit by a tornado last spring and where the casino employs about 300.

St. Louis-based Isle of Capri does not anticipate any layoffs in Caruthersville, said spokeswoman Jill Haynes.

The Missouri Gaming Commission voted in November to take over Casino Aztar until a new owner could be found, a decision criticized by Attorney General Jay Nixon because he believed it conflicted with the commission's regulatory duties.

Commission director Gene McNary defended the unusual move, saying it was needed to save the jobs and $6 million in fees and taxes the casino pays.

McNary said that because Isle of Capri already operates two casinos in Missouri -- in Kansas City and Boonville -- the background investigation won't take as long as if a company new to Missouri was the potential buyer.

"We will still do a background investigation, especially of the new manager at the Caruthersville boat," McNary said. He believes the investigation could be finished by the summer.

Nixon said in a statement that his concerns had been that the state's gaming commission was acting in dual roles, as both operator and regulator, when other options had been available.

"It's time for the Missouri Gaming Commission to return to its appropriate role as a regulator," he said.

The casino's previous owner, Phoenix-based Aztar Corp., was sold to Fort Mitchell, Ky.-based Columbia Sussex. But that company could not find and license a buyer for the Caruthersville casino acceptable to the commission by a Nov. 19 deadline. So the commission appointed the state's gaming enforcement manager to run the casino for up to nine months.

The Gaming Commission didn't actually begin overseeing the casino until early January, after the sale was finalized.

The Nasdaq Stock Market said last week it could delist the Isle of Capri because the casino company has to restate its earning for three years. Haynes said the restatement primarily relates to operations of a subsidiary in the United Kingdom.

The company also missed a March 9 filing deadline for submitting a quarterly financial report to the Securities and Exchange Commission.

Company officials said they plan to request a hearing before the exchange's Listing Qualifications Panel. In the meantime, Isle of Capri will be allowed to continue trading on the Nasdaq exchange.

In addition to Missouri, Isle of Capri operates casinos and racetracks in Mississippi, Louisiana, Iowa, Colorado, Florida, the Bahamas and the United Kingdom, Haynes said. Isle of Capri stock rose 2 cents to close at $24.81 on the Nasdaq Stock Market.

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