Aztar casinos being bought by rival firm for $1.45 billion

~ Officials expect no changes at the Caruthersville casino.

Like corporations in many other industries, casinos are merging to stay competitive. Pinnacle Entertainment Inc. announced earlier this week its intention to purchase Aztar Corp. for approximately $1.45 billion.

Based in Las Vegas, Aztar owns five casinos nationwide and employs 12,000 people. Its highest profile assets are the Tropicana hotel-casinos in Las Vegas and Atlantic City. These properties annually account for more than half of Aztar's revenue.

The Aztar Casino in Caruthersville, Mo., 80 miles south of Cape Girardeau, is the company's smallest casino, employing 350 people. Gamblers there should not expect any changes, officials said.

Pinnacle is roughly the same size as Aztar with assets of $1.14 billion compared to Aztar's $1.1 billion. The deal would give Pinnacle, which operates primarily in the Midwest and South, a coveted foothold in Las Vegas.

George Stadler, president and general manager of Aztar, said the sale would mean growth and improvement for all of Aztar's locations.

"It's just a fantastic opportunity," he said. "One of the great things about this deal is that it presents no overlap. It's not a case where companies merge and then all of a sudden they own two casinos in the same region and want to get rid of one of them. The CEO of Pinnacle assured me that that's not the case."

Stadler said the deal will likely take nine months to a year to go through. Once it does, Pinnacle will become the sixth-largest gaming company in the country.

Pinnacle has designs on growing further, said Stadler, who wouldn't be surprised if the company grows to become the fourth largest in gaming.

Pinnacle will take over $723 million in debt from Aztar. The company hopes to take advantage of the prime real estate of the Tropicana in Las Vegas and will plan an overhaul of the site. The design phase for that project will likely take two years, during which time the Tropicana will remain open.

In February, Pinnacle bought the President's Casino in St. Louis, which will likely close once the company opens a $400 million gaming complex on Laclede's Landing in 2007. The company is funding much of its maneuvering with insurance money received after its Casino Magic riverboat in Biloxi, Miss., was destroyed by Hurricane Katrina.

Stadler said Aztar made $2.1 million in improvements to its casinos last year and expects that all renovations and further improvements planned for properties will go forward as scheduled.

"This is a case of a quality company being purchased by another quality company, and when that happens you get even more quality," he said.

After the sale goes through, Pinnacle will own 12 major gaming properties in the United States, 8,800 hotel rooms and approximately 22,000 slot machines.

tgreaney@semissourian.com

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