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Another Casino Acquisition? Harveys Casino Resorts Offers to Buy Pinnacle Entertainment

8 March 2000

Pinnacle Entertainment Inc. (NYSE: PNK) (formerly known as Hollywood Park Inc.) said today that it has received a buyout offer from Harveys Casino Resorts. Harveys is offering $25 a share cash for all of Pinnacle's stock.

The offer comes only two days after Las Vegas giant Mirage Resorts capitulated to a buyout offer from a competing Las Vegas giant, MGM Grand. Ironically, Pinnacle itself has been viewed as a consolidator of smaller casino companies.

The company just changed its name, effective Feb. 28, to Pinnacle from Hollywood Park. It began as the operator of that southern California horse racetrack, but since 1997 has been acquiring casinos in markets outside Las Vegas and Atlantic City.

Pinnacle bought two small chains, Casino Magic and Boomtown, which gave the company casinos in Nevada, Mississippi, Louisiana and Argentina. It decided to exit the racetrack business, selling Hollywood Park and negotiating a sale that is still pending of its Turf Paradise in Arizona.

The company is also building the Belterra Resort and Casino, a hotel-casino complex in southern Indiana, about 35 miles southwest of Cincinnati. That's supposed to open in August.

With the assumption of Pinnacle's debt, the offer is worth $1.3-$1.4 billion. Shares in Pinnacle rose $1.75 today, closing at $21.

Pinnacle made the announcement after the Wall Street Journal broke the story this morning. In addition to the usual contingencies, Pinnacle said, the deal depends on an agreement by Pinnacle's senior management to retain stock in the combined company.

Pinnacle said it agreed to negotiate exclusively with Harveys through the end of March. Pinnacle postponed next month's annual shareholders meeting.

Harveys, founded in 1944, is controlled by Colony Capital, a private investment firm based in the Los Angeles area, as is Pinnacle. Harveys has hotel-casinos in Lake Tahoe, Nevada; Council Bluffs, Iowa; and Central City, Colorado.

The company was an original partner and manager of the Hard Rock hotel-casino in Las Vegas, but later sold its interests.

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