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Gaming Guru

Howard Stutz

Aztar investors approve sale to Columbia Sussex

18 October 2006

PHOENIX, Arizona -- Shareholders on Tuesday approved a $2.75 billion buyout of the Tropicana's parent company.

In a special meeting in Phoenix, shareholders of Aztar agreed to sell all outstanding shares of the company to Kentucky-based Columbia Sussex Corp. for $54 a share.

The deal, which is pending approval of state gaming regulators in Nevada, New Jersey and Indiana, will give Columbia Sussex control of both Tropicana casinos in Las Vegas and Atlantic City, the Ramada Express in Laughlin and Aztar's casino in Evansville, Ind. An Aztar casino in Caruthersville, Mo., will be sold before the transaction closes.

Gaming Control Board member Mark Clayton said Nevada gaming authorities are scheduled to review the proposed buyout next month. No other states have approved the transaction.

Privately held Columbia Sussex, which operates four casinos in Nevada, won a 2-month-long bidding war for control of Aztar in May. The company agreed to the stock purchase in an all-cash deal, an assumption of the company's $676 million in debt and conversion of the company's bonds.

Once the deal closes, Columbia Sussex will operate 13 casinos in Nevada, Louisiana, Mississippi, Illinois, Indiana and New Jersey. The company's New Orleans riverboat was destroyed a year ago by Hurricane Katrina and is being moved to a neighboring city.

Although the companies have said the transaction is expected to close by year's end, Columbia Sussex is interested in seeing the deal completed as soon as possible.

The purchase agreement calls for the transaction to close by Nov. 19, or else the price per share will increase less than a penny per share a day. The price goes up by just less than 2 cents per share a day if the deal isn't closed by Feb. 19.

When the deal was reached, Columbia Sussex President Bill Yung III said he didn't have any plans to close the Tropicana Las Vegas. Instead, he said, he'd have architects explore improvements to the casino's 34-acre site at the corner of the Strip and Tropicana Avenue.

In late July, Columbia Sussex and Aztar said the waiting period under the Hart-Scott-Rodino Antitrust Act had expired.

Aztar shares rose 2 cents, or 0.04 percent, Monday to close at $53.32 on the New York Stock Exchange.