Offering Expected to Raise $164.1 Million for Pinnacle

16 January 2006

By Howard Stutz

Las Vegas-based Pinnacle Entertainment said Friday its recently announced stock offering will result in $164.1 million in gross proceeds to the company, money that will be used to add hotel rooms to three of its casinos.

Pinnacle is expected to close the public offering on Thursday. Six million shares of newly issued common stock was priced at $27.35 per share. Lehman Bros. and Deutsche Bank Securities are acting as joint book-running managers of the offering. Bear Stearns and Merrill Lynch & Co. are acting as joint lead managers of the offering.

Pinnacle said the proceeds will let the company add more hotel rooms to its Belterra Casino in Indiana and L'Auberge du Lac in Louisiana. In addition, the company will build a room tower at Boomtown New Orleans, which currently does not have any hotel rooms.

Pinnacle executives said construction would begin on all three expansions this year with a scheduled completion in 2007.

Pinnacle said any remaining proceeds from the offering would be used to fund part of the costs of the company's two under-construction St. Louis projects, a $400 million hotel-casino near the Gateway Arch and $375 million hotel-casino 10 miles from downtown.

After the offering closes, the underwriters have a 30-day option to purchase an additional 900,000 shares of common stock from Pinnacle.

Pinnacle has told investors it is still assessing its options in rebuilding Casino Magic in Biloxi, Miss., which was destroyed by Hurricane Katrina Aug. 29. Also, the company is seeking a license to build a 3,000-slot machine casino and entertainment attraction in Philadelphia.

Pinnacle shares fell 71 cents, or 2.58 percent, Friday to close at $26.80 on the New York Stock Exchange.