Iowa approves Pinnacle Entertainment deal

Pinnacle Entertainment announced that it has reached an agreement in principle with the Bureau of Competition Staff of the Federal Trade Commission that, subject to negotiation of a consent order, Commission approval and gaming regulatory approvals, would permit the consummation of its proposed acquisition of Ameristar Casinos.

The proposed purchase would see Las Vegas-based Pinnacle Entertainment hand over us$ 2.8 billion in cash including assumed debt in order to take control of Ameristar Casinos and its facilities in St Charles near St Louis, Kansas City, Missouri, Council Bluffs, Iowa, Black Hawk, Colorado, Vicksburg, Mississippi, East Chicago, Indiana, and Las Vegas, Nevada, in addition to a resort under construction in Lake Charles, Louisiana. 

“We thank the Iowa Racing and Gaming Commission for diligently and expeditiously approving our proposed acquisition of Ameristar Casinos and look forward to welcoming Ameristar Casino’s terrific gaming entertainment property in Council Bluffs, Iowa, into the Pinnacle Entertainment family in the near future,” said the firm’s CEO Anthony Sanfilippo. “With both Iowa and Nevada approvals now behind us, we continue to work to obtain Federal Trade Commission and remaining state gaming regulatory agency clearances necessary to complete the transaction. We expect to close the transaction in the 2013 third quarter.” 

On May 28, 2013, the Commission issued an administrative complaint regarding the proposed acquisition. Since that time, the parties have made significant progress toward resolving the matter without the need for administrative litigation. Consequently, on June 13, 2013, Federal Trade Commission Chief Administrative Law Judge D. Michael Chappell granted Pinnacle's and Ameristar's unopposed motion to extend the deadline to respond to the administrative complaint by 30 days.

In the trailing twelve month period ending March 31, 2013, the net revenues and Adjusted EBITDA for Pinnacle's St. Louis segment were us$ 389.4 million and us$ 98 million, respectively, and Lumiere Place Casino and Hotels contributed 49% and 35%, respectively, to those segment results. Ameristar has previously disclosed that through March 31, 2013, it invested total capital of us$ 144.5 million in the Lake Charles project, including purchase price, capital expenditures and escrow deposits.  Ameristar has also previously disclosed that in the 2013 second quarter, it expects capital spending of us$ 84 million related to Lake Charles design and construction costs.

Pinnacle also intends to negotiate a consent order with the Bureau of Competition Staff, which would permit Pinnacle to complete its acquisition of Ameristar subject to any divestitures and other terms and conditions specified in the consent order. A consent order must be approved by a vote of the Commission, which may accept or reject all terms and conditions. 

Pinnacle Entertainment runs seven casinos in the states of Louisiana, Indiana and Missouri in addition to a racetrack facility in Ohio and purchased Los Angeles-based sporting events organiser Federated Sports and Gaming Incorporated, which is responsible for the annual Heartland Poker Tour, a year ago.