Station buyout backed

Station Casinos shareholders voted Monday by greater than a two-thirds margin to approve a $5.4 billion management-led buyout of the gaming company.

The newly formed company, Fertitta Colony Partners, is a joint venture between members of the Station Casinos' founding family and Los Angeles-based investment firm Colony Capital.

Final totals from the vote, held Monday at Red Rock Resort, and an official statement are scheduled to be issued today.

The buyout still needs approval from federal regulators and state gaming regulators in Nevada and California. No date has been set for the agreement to go before the Nevada gaming officials.

Chairman and Chief Executive Officer Frank Fertitta III conducted Monday's 15-minute meeting flanked by company board members and senior executives.

"I think you will all agree it has been a very successful 15 years at Station Casinos," Fertitta said.

The Fertittas, board members and executives all declined to comment after the vote. No shareholders asked questions or publicly dissented during the meeting.

Bea Miller, who also attended the company's first shareholders meeting, was one of a few dozen individual shareholders attending the meeting.

"I'm sorry to see it end," she said after the vote. "I would have loved to have stayed on as a stockholder. I bought it because I liked going to Station Casinos from the first time I stepped my foot over the door."

Other individual shareholders were less happy about the buyout but declined to discuss the issue publicly.

Brothers and company executives Frank Fertitta III and Lorenzo Fertitta, and sister Delise Sartini and husband, Blake, will invest $870.5 million worth of company stock toward a 25 percent equity investment in the new company, which will continue to operate as Station Casinos. Colony Capital will contribute $2.6 billion for a 75 percent equity share.

Fertitta Colony Partners is taking the company private after offering an 8 percent premium to the Feb. 23 share price. That offer was better than its previous bid of $82 a share made Dec. 4. The deal also includes assumption of $3.3 billion in debt, including $1.1 billion of revolving credit due to be paid off at closing of the deal.

Several shareholder groups sued the company and the investor group after the December offer, saying it was too low. Six consolidated District Court cases remain open. Attorneys for the shareholders could not be reached late Monday.

The Fertitta brothers and Colony Capital Chairman and CEO Tom Barrack will comprise the new company's board of directors. Barrack holds a Nevada gaming license through Colony Capital's $280 million purchase of the Las Vegas Hilton in 2003.

Frank Fertitta Jr. launched Station Casinos in 1976. The company started with the Bingo Palace, a 100-slot machine gambling hall located where Palace Station now stands.

Frank Fertitta III has been chairman and chief executive officer of Station Casinos since the company went public in 1993. Lorenzo Fertitta has been an executive director since 1991 and president since 2000. It is expected that both will continue to operate the new company in their current roles.

With the buyout, Frank Fertitta III would receive a little more than $148.6 million for his remaining stock options and outstanding shares. Vice Chairman and President Lorenzo Fertitta would receive a little more than $145 million for his remaining stock options and outstanding shares..

The Sartinis will receive a little more than $201 million for their common stock but will have no active role in the company's day-to-day operations.

Shareholder Miller said Monday was more emotional than when she had to cash in her Mirage Resorts stock for the MGM Grand buyout in 2000 because she has a real connection with Palace Station.

Miller said that even though she will no longer be a shareholder she will still spend time at Palace Station with her friends.

"Mr. (Frank) Fertitta (III) has been so generous with the stockholders," Miller said. "I enjoyed being a stockholder, and I'm sorry the stock is being taken down."

Station Casinos shares fell 3 cents, or 0.04 percent, Monday to close at $82.72 on the New York Stock Exchange.

The Associated Press contributed to this report.