Pinnacle Entertainment says not likely to acquire Ameristar Casinos

By Lisa Kerner

Charlotte, N.C., Aug. 6 - Pinnacle Entertainment, Inc. said it most likely won't acquire Ameristar Casinos Inc., citing charitable trust issues and current market conditions.

In October 2007, Pinnacle acquired about $40 million of Ameristar common stock at an average price of $32 per share, according to a Pinnacle news release.

Ameristar's founder, who owned about 55% of the company, died in 2006 and left most of his shares to The Craig H. Neilsen Foundation.

Pinnacle believes because the foundation is required to diversify its assets under federal law, there is "high likelihood" that Ameristar would be sold.

Despite the fact that a combination of Pinnacle and Ameristar would create economies of scale as well as marketing efficiencies, buying Ameristar would requiring refinancing the debt of both companies, Pinnacle noted.

Pinnacle said the cost of refinancing, coupled with a 60% decline in the companies' stock prices and a tight credit market, would offset most of the value created by combining with Ameristar.

Both Pinnacle and Ameristar are Las Vegas-based casino operators.

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