December 14, 2010 - 7:37 am
Regional gaming giant Ameristar Casinos took itself off the market Tuesday as analysts speculated there was little buying interest in the Las Vegas-based company.
The news sent Ameristar shares tumbling as much as 9 percent on the Nasdaq National Market as investors sought to understand where the company, which operates eight casinos in seven regional markets, was headed.
JP Morgan gaming analyst Joe Greff told investors there were few buyers for a casino company.
“We interpret this to mean that there was little interest from third parties in buying the entire company by either casino operators or private equity at prices much higher than the $18 (more or less) share price range,” Greff said in a research note.
Shares of Ameristar closed Tuesday at $16.64, down $1.26 or 7.04 percent.
In a statement, Ameristar said it canceled plans to consider selling the company, saying “a sale is not in the best interests of the company and its stockholders at this time.”
Ameristar hired an investment bank and legal adviser in August to consider sales opportunities for the company or some of its regional casinos, which are in Missouri, Mississippi, Indiana, Iowa and Colorado. The company also operates two casinos in the Northern Nevada community of Jackpot.
KDP Investment Advisors gaming analyst Barbara Cappaert thought Ameristar would now look to restructure portions of the company’s outstanding debt that is coming due over the next two years.
“We suspect the appetite to fund a large gaming buyout was not in the market,” Cappaert said.
Contact reporter Howard Stutz at email@example.com or 702-477-3871.