The stockholders of Las Vegas-based Ameristar Casinos Inc. on April 25 approved the company’s planned acquisition by Pinnacle Entertainment, which had been disclosed in December.
But Pinnacle is believed to be in talks with the FTC, which last week stopped the proposed $2.8 billion acquisition, saying the deal would hurt competition, particularly in Missouri and Louisiana. Any discussions most likely revolve on divestitures of properties by Pinnacle to complete the deal.
Pinnacle owns three casinos in Louisiana — two under the Boomtown brand in Bossier City and New Orleans — two casinos in Missouri, two in Indiana and a horse racetrack in Ohio.
In addition to Vicksburg, Ameristar owns and operates casino facilities in St. Charles near St. Louis, Mo.; Kansas City, Mo.; Council Bluffs, Iowa; Black Hawk, Colo.; East Chicago, Ind.; the Jackpot, Nev., properties; and a casino resort under construction in Lake Charles, La. It employs 800 at its 72,210-square-foot casino and hotel in Vicksburg.
The acquisition would give the Pinnacle three of the four main casinos in the St. Louis area, and would give it control of the top-producing casino in Kansas City.
In Lake Charles, an Ameristar casino is being built next to an existing Pinnacle casino, making them close competitors.
The FTC has scheduled a hearing on the acquisition to begin Oct. 28, unless an agreement is reached first. The proposal calls for the deal to close by the end of September.
The FTC complaint will have little affect on the approval process in Pinnacle acquiring the Ameristar property in Vicksburg, said Allen Godfrey, executive director of the Mississippi Gaming Commission.
According to Bloomberg News, the fact that the FTC and Pinnacle haven’t already reached a settlement “suggests to us the contested issues are not clear-cut and are more contentious or novel than previous gaming mergers,” Cameron McKnight, an analyst with Wells Fargo & Co., said in a May 30 note with associates Barry Jonas and Rich Cummings.