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Howard Stutz

Aztar Will Sell Casino to Meet Buyout Deal's Terms

22 August 2006

LAS VEGAS, Nevada -- The Tropicana's parent corporation has complied with a condition of its $2.75 billion buyout agreement with Columbia Sussex Corp., striking a deal last week to sell its small casino in Caruthersville, Mo., for an undisclosed price.

Phoenix-based Aztar Corp. agreed in May to be bought by Kentucky-based Columbia Sussex for $54 per share for all outstanding shares in the company and assumption of its $676 million debt.

Privately held Columbia Sussex, which operates the off-Strip Westin, the River Palms in Laughlin and two casinos in South Lake Tahoe, is most interested in owning Aztar's Tropicana casinos in Las Vegas and Atlantic City and the Ramada Express in Laughlin.

The company requested that Aztar sell its Missouri casino before the deal closed.

Columbia Sussex had contentious dealings with Missouri gaming regulators a year ago when it tried to buy a St. Louis riverboat casino. Officials said in May that the company was not interested in applying for a Missouri gaming license.

"It was a condition of our agreement," Aztar spokesman Joe Cole said. "We had to sell it or close it."

Cole said the transaction is subject to Missouri gaming regulators' approval.

The Aztar casino, in southern Missouri near the border with Tennessee, has just 650 slot machines, several table games, an eight-table poker room, restaurant and bar. Aztar had explored adding hotel rooms to the property before its deal with Columbia Sussex.

Aztar sold the casino to Fortunes Entertainment, a company operated by Argosy Gaming co-founder Lance Callis. Argosy was a publicly traded gaming company sold last year to Penn National Gaming.

Columbia Sussex won a six-week-long bidding war for Aztar, beating out three other casino operators for control of the company.

The purchase agreement calls for the transaction, which is subject to approval of gaming regulators in Nevada, New Jersey and Indiana, 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.

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

Nevada Gaming Control Board member Mark Clayton said Monday that state gaming agents are actively working toward completing their investigation of the transaction, but couldn't say if the processes would be complete by November.

"(Columbia Sussex) has a requested a place on the November (Gaming Control Board) agenda," Clayton said.

Gaming analysts believe regulators will look closely at Columbia Sussex's plans for managing the Tropicana properties, which would become the company's largest gaming holdings.

Aztar shares rose 9 cents or 0.17 percent, Monday to close at $52.01 on the New York Stock Exchange.