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Aztar Acquires Partners' Interest in Tropicana Las Vegas

The company had announced on January 30 its intent to exercise its option to acquire the half-interest. The company paid $117.5 million, funded by cash and borrowings under the company's bank revolving credit facility. Aztar also assumed approximately $49 million of existing partnership debt that Aztar serviced under its operating lease from the partnership. There are no plans for immediate redevelopment of the Tropicana site and current operations are to be continued indefinitely.

The company believes that the transaction will be accretive to the company's earnings and free cash flow and also will generate other significant benefits to Aztar, including eliminating an operating lease and the associated rent payments to the partnership; obtaining unrestricted rights to the ``Tropicana'' brand name for casinos and casino resort hotels; and making it easier for investors to understand the company's financial statements.

The company continues to conduct feasibility studies to master-plan a potential development of the 34 acres located at the southeast quadrant of the intersection of Las Vegas Boulevard (the Strip) and Tropicana Avenue. The master plan envisions the creation of two separate but essentially equal and inter-connected 17-acre development sites, both fronting the Las Vegas Strip. The north site would be developed by Aztar. The south site would be held for future Aztar development, joint venture development, or sale for development by another party.

``Gaining full control of the Tropicana site is a strategically important step for Aztar,'' said Paul E. Rubeli, Aztar chairman of the board, president and chief executive officer. ``We believe the location is absolutely the best on the Strip. We expect to complete our design development and review process by the summer of 2003. At that time, we will confirm our project scope, cost, timing and return assumptions; assess the strength of and outlook for the Las Vegas market; and make a decision on whether or not to proceed with a redevelopment of the site.''

Aztar is a publicly traded company that operates Tropicana Casino and Resort in Atlantic City, New Jersey, Tropicana Resort and Casino in Las Vegas, Nevada, Ramada Express Hotel and Casino in Laughlin, Nevada, Casino Aztar in Caruthersville, Missouri, and Casino Aztar in Evansville, Indiana.

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