This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies.  Find out more here  Close
Pinnacle adds markets in $2.8b deal
December 21 2012

Pinnacle Entertainment’s CEO said its acquisition of Ameristar allows it to be less dependent on existing markets in the gaming company’s portfolio.

  • The deal includes $1.9 billion in assumed debt.
  • “We think of it as a natural extension of the progress we’ve been making,” Pinnacle’s CEO Anthony Sanfilippo said.
  • Sanfilippo said the company is open to evaluating an entry into the Las Vegas market.
By Shawn A. Turner
HNN contributor

REPORT FROM THE U.S.—Pinnacle Entertainment plans to achieve its goal of increasing market diversification through its announced $2.8-billion acquisition of Ameristar Casinos.

The deal, which was announced Friday and includes $1.9 billion in assumed debt, would nearly double Pinnacle’s portfolio in the United States. The casino-resort operator will add eight properties and approximately 2,400 rooms to its existing portfolio of nine properties and approximately 2,600 rooms. The deal is expected to close by the end of the third quarter of 2013.

During a conference call with analysts, Pinnacle CEO Anthony Sanfilippo said he is not bearish on the markets in which his company is operating, but rather he views the deal as complementing the group’s existing portfolio.

“We think of it as a natural extension of the progress we’ve been making,” Sanfilippo said. The gaming company would enter new states in Nevada, Colorado, Iowa and Mississippi.

Gordon R. Kanofsky, CEO and director at Ameristar, said the deal adds value for shareholders. Sanfilippo said he does not foresee any regulatory issues that could trip up the closing process.

“It’s been spirited at times,” Kanofsky said of the negotiations between the two companies, “but we’re very pleased to reach this day.”

Ameristar’s stock price as of approximately 11:40 a.m. Eastern Standard Time was up nearly 20% to $26.43 per share. Year to date, the company’s stock is up more than 50%. Pinnacle, meanwhile, saw its stock grow by more than 20% on the day, and is up nearly 60% year to date.

The deal between the two companies was valued at $26.50 per Ameristar share.

Future plans
Regarding future development plans, Sanfilippo was asked during the call if this deal would propel the company into the Las Vegas market for the first time.

“That’ll be something we’ll evaluate … but that’s not our immediate focus,” he said.

Executives also said they might consider consolidating as a real estate investment trust at some point, but did not provide further details. Executives of both companies stated several times that the short-term focus is to close the deal in front of them.

“By linking together Pinnacle and Ameristar properties, we are really creating a terrific portfolio,” Sanfilippo said.

Login or enter a name   Post Your Comment  Check to follow this thread via email alerts (must be logged in)
(4000 characters max)

Comments that include blatant advertisements or links to products or company websites will be removed to avoid instances of spam. Also, comments that include profanity, lewdness, personal attacks, solicitations or advertising, or other similarly inappropriate or offensive comments or material will be removed from the site. You are fully responsible for the content you post. The opinions expressed in comments do not necessarily reflect the opinions of Hotel News Now or its parent company, STR and its affiliated companies. Please report any violations to our editorial staff.

Tracking Baha Mar’s development trek
What to know about Marriott’s Starwood deal
Marriott-Starwood deal is a 'game changer'
Marriott/Starwood must clear loyalty hurdle
Analysts talk Marriott’s new brand overlap
The 10 largest hotel companies by room count
Concord embraces change
Red Roof Inn on international track
2015 in 10 words
Condor Hospitality takes flight
HNN recaps Lodging Conference 2015 Day One
Relationships key in Paris, Brussels rebuild
Snapshot: A labor of love in Silicon Valley
Straight-to-room is coming … and I can’t wait
Finding the best talent is a two-way street
STR: US results for week ending 21 November
Fitness can drive guest loyalty, profitability
Contact Us
Hotel News Now
18500 Lake Rd.
Suite 310
Rocky River, Ohio 44116
Copyright © 2004 - 2015 Hotel News Now, a division of STR, Inc. All Rights Reserved.   Privacy