Pinnacle to buy Ameristar Casinos

In a deal that would more than double its size and give it new markets, Pinnacle Entertainment said Friday that it will buy rival Ameristar Casinos for about $869 million, plus take on $1.9 billion of its debt.

Pinnacle has seven casinos in Louisiana, Missouri and Indiana. It’s developing another property in Ohio, and also has a racetrack in the state. Ameristar’s holdings include eight casinos in Missouri, Iowa, Colorado, Mississippi, Indiana and Nevada.

Pinnacle said buying Ameristar could help it become a bigger player in the gambling industry, while trimming some costs.

U.S. casinos have struggled to recover from the recession as consumers watch spending. Larger U.S. casino companies have increasingly relied on their properties in Asia for profits.

The deal, which is expected to close by the end of the third quarter, has been approved by the boards of both Las Vegas operators. Pinnacle said it has received a financing commitment.

Pinnacle Entertainment Inc. said the acquisition would save it at least $40 million a year and boost earnings. If the two companies had already been
combined into one, it would have generated $2.4 billion in revenue in the 12 months through September, Pinnacle said.

Pinnacle’s Louisiana properties are L’Auberge Casino & Hotel, Baton Rouge; Boomtown Casino, New Orleans; L’Auberge Casino Resort, Lake Charles; and Boomtown Hotel & Casino, Bossier City.