Ameristar will acquire bulk of founder’s stock

Regional gaming operator Ameristar Casinos will acquire the bulk of the common stock now owned by the estate of the company's founder, who died in 2006.

In a statement Monday, Las Vegas-based Ameristar said it would purchase more than 26.1 million shares of the company's common stock, owned by the Craig H. Neilsen Foundation, for $17.50 per share, or $457.6 million.

The transaction will reduce the foundation's stake in Ameristar to 17 percent from 55 percent. The company said the deal would leave public shareholders in greater control of the casino company, which operates eight casinos in seven markets.

Ameristar said it will recapitalize the company's debt and arrange $2.1 billion of new debt to replace $1.5 billion now in place.

"We believe this transaction will meaningfully benefit Ameristar stockholders in that it is an excellent opportunity to acquire a substantial portion of the shares of a significant stockholder on an efficient and favorable basis to the company, especially given the current conditions in the credit markets," Ameristar Chief Financial Officer Thomas Steinbauer said in a statement.

Analysts said the deal, which is subject to gaming and regulatory approvals and is expected to close by the end of June, removes a question that had been hovering over the company's future since Neilsen's death.

"The current refinancing and acquisition of the estate's shares changes the overall dynamics of the company significantly," Union Gaming Group principal Bill Lerner said. "From a public equity perspective, Ameristar now moves away from special situation status in our view, and back to a more traditional regional gaming operator."

Ameristar's board of directors hired an investment bank to explore a possible sale of the casino operator last year, but canceled the idea in December.

The Neilsen Foundation supports spinal cord injury research and treatment.

When the deal closes, Ameristar will no longer qualify as a controlled company under Nasdaq listing rules. The casino operator said its would have a majority of independent directors within 12 months.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.