Aztar Bidding War

In an escalating bidding war between four companies, Pinnacle Entertainment raised its offer April 19th for Phoenix-based casino operator Aztar Corp. by 13 percent to about $1.65 billion.

Pinnacle said it had raised its offer to $43 a share at press time.

Bidding for Aztar has been feverish because it owns a prime redevelopment opportunity on the Las Vegas Strip: a 34-acre plot on a busy crossroad that now hosts the Tropicana resort. Aztar also owns the Tropicana hotel-casino in Atlantic City, N.J., and other casinos in Missouri and Indiana.

Pinnacle and Aztar agreed in March to a deal under which Pinnacle would pay Aztar shareholders $38 per share in cash, or about $1.45 billion. As part of the deal, Pinnacle would also assume $723 million in debt, bringing the overall value to $2.1 billion.

Since the original agreement was reached, three parties entered the competition to win Aztar. The latest bid of $47 per share came April 17th from Wimar Tahoe Corp., also known as Columbia Entertainment.

Aztar has also fielded bids from real estate investment trust Colony Capital LLC, which offered $41 per share, and Ameristar Casinos, which bid $43 per share.

Aztar said in a statement April 19th that its board has determined Columbia’s bid is “likely to result in a superior proposal” compared to the amended agreement with Pinnacle.

Pinnacle shares, which reached a 52-week high April 18th on speculation it wouldn’t pursue the acquisition, sank 75 cents, or 2.4 percent, to $31.09 April 19th on the NYSE. Pinnacle would get a $42 million termination fee if its deal for Aztar doesn’t go through.

Meanwhile, in a deal announced April 17th, Pinnacle may buy two Lake Charles, La., riverboat casinos from Harrah’s Entertainment.

The deal does not make it clear if the riverboats will remain in southwest Louisiana.