Visitors wait to check in at the front desk at the Tropicana in February. The hotel and the prize 34 acres it rests on took on new owners Friday when Aztar Corp. agreed to be sold. Photo by John Gurzinski/Review-Journal File Photo Columbia Sussex President Yung III says his company has no plans to close the Tropicana. Review-Journal File Photo

Kentucky-based Columbia Sussex Corp. became the apparent winner of the two-month long bidding war for control of Aztar Corp. on Friday.

The president of the privately held company, however, said he won't be so quick to shut down the prize of the $2.75 billion deal, the Tropicana Las Vegas.

Phoenix-based Aztar, the object of 15 buyout proposals from four casino companies since March 13, signed a merger agreement with Columbia Sussex on Friday afternoon.

The all-cash deal calls for Columbia Sussex to pay $54 a share for all outstanding shares in Aztar, assume the company's $676 million in debt, and convert the company's bonds.

The acquisition incudes the Tropicana casinos in Las Vegas and Atlantic City and three smaller casinos in Laughlin, Missouri and Indiana. Pending regulatory approval, the companies hope to close the deal by the end of November.

Columbia Sussex said it has a commitment from Credit Suisse to provide $3.15 billion to fund the transaction. If the transaction isn't completed by Nov. 19, the price per share will increase less than a penny per share a day. The price goes up by just under 2 cents per share a day If the deal isn't closed by Feb. 19.

In a phone interview from Atlantic City, where he was preparing to meet with New Jersey casino regulators, Columbia Sussex President Bill Yung III said the company would have architects start looking at the Tropicana Las Vegas and its 34-acre Strip location as soon as next week.

Closing the 1,880-room Tropicana and its 61,000-square-foot casino is not in the immediate future.

"I haven't been inside the Tropicana in about a year," Yung said. "I think we'll try to use what we can and knock down what we can't use. We're builders and we have a large construction department. We have a lot of opportunities with that site."

In a statement, Aztar Chairman Bob Haddock said company shareholders hit the jackpot.

"Our agreement with Columbia provides an increased all cash premium to our shareholders and reflects Columbia's strong commitment to the transaction," Haddock said.

The agreement trumped a previously signed merger accord between Aztar and Las Vegas-based Pinnacle Entertainment, which was amended four times since March 13. Aztar cancelled that contract Friday and paid Pinnacle a breakup fee of $52.2 million and covered $25.8 million of the company's legal expenses.

Also on Friday, Columbia Sussex deposited $313 million into a bank account as a break-up fee that Aztar would keep if the deal collapses. Out of that deposit, $78 million was paid to Pinnacle to cover the termination expenses.

Earlier Friday, Pinnacle, which had increased its bid for Aztar to $51 a share on May 5, announced it wouldn't increase the offer again.

"After careful consideration and due diligence, Pinnacle's management and board of directors have determined not to increase Pinnacle's offer to acquire Aztar," Pinnacle Chairman Dan Lee said in a statement. The company's original bid to buy Aztar, which kicked off the bidding war, was for $38 a share, or $2.1 billion.

Yung said the company was ready to kick the price of the deal up a notch in order to get Aztar. Columbia Sussex entered the bidding for Aztar a month into the process when Yung realized the company could be had for the right price.

"I played with the numbers and we were prepared to pay whatever it was until we won," Yung said. "Aztar is getting full value for their properties, but I think we can still make money in those places."

Yung said buying Aztar was "a real estate play" in looking at the Tropicana Las Vegas site. In evaluating the location, Yung said the land could eventually be split into two or three parcels.

"We've talked with some people already. You could see two or three franchises on the site," said Yung, whose company operates 82 hotels in the United States, Canada and the Caribbean.

Once the transaction is completed, Columbia Sussex will move into the upper tier of the nation's casino operators. With Aztar's five casinos, Columbia Sussex would have 14 gambling halls in seven states. But the company's casino portfolio is in a state of flux.

Columbia Sussex plans to sell Aztar's casino in Caruthersville, Mo., rather than apply for a license with state gaming regulators. On Wednesday, Columbia Sussex agreed to purchase the Casino Queen riverboat in East St. Louis, Ill., across the Mississippi River from St. Louis, in a separate deal. No terms were disclosed.

Meanwhile, the Belle of Orleans floating casino in New Orleans was damaged by Hurricane Katrina and has been closed since Aug. 29. The company has asked Louisiana regulators for permission to move the boat about 90 miles east to St. Mary's Parish.

"We're still a small company," Yung said of his family owned business headquartered in Fort Mitchell, Ky., about 16 miles south of Cincinnati. "But the size of the company is something we can handle."

Last year, Aztar reported overall revenues of $915.4 million, with $490.1 million coming from the Tropicana Atlantic City. Yung said he was looking forward to that property becoming part of Columbia Sussex.

In addition, acquiring the Aztar-owned Ramada Express would give Columbia Sussex a second casino in the Laughlin market.

"It's continued to grow quite well despite the impact of Indian gaming," Yung said. "It's a good, steady market."

Aztar announced the deal just before the end of Friday's trading session on the New York Stock Exchange. Shares in the company fell 0.92 percent to close at $51.57, off 48 cents.