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Pinnacle Entertainment Announces Agreement in Principle To Settle Shareholder Lawsuit

15 September 2000

GLENDALE, California -- (Press Release) -- Sept. 15, 2000 -- Pinnacle Entertainment, Inc. (NYSE: PNK) announced that it has reached an agreement in principle with respect to settlement of the pending purported class action lawsuit against Pinnacle Entertainment and its directors relating to the proposed merger in which Pinnacle Entertainment would be acquired by PH Casino Resorts, Inc, a subsidiary of Harveys Casino Resorts (an affiliate of Colony Capital LLC).

The settlement is subject to the execution of a definitive settlement agreement and court approval of that agreement. The defendants' agreement to the tentative settlement does not constitute, and should not be construed as, an admission that the defendants have any liability to or acted wrongfully in any way with respect to the plaintiff or any other person.

Pursuant to the proposed settlement, certain provisions of the merger agreement between Pinnacle Entertainment and PH Casino Resorts have been amended. PH Casino Resorts has consented to such amendments.

The amendments provide for (1) extension of the deadline for the opening of the Belterra Casino Resort from September 15, 2000 to November 15, 2000; and (2) a $10 million increase in the permitted $207 million budget for completing the Belterra Casino Resort.

These amendments are intended primarily to accommodate the additional time and expenses necessary to complete the Belterra Casino Resort in light of the accident on July 31, 2000 involving Pinnacle Entertainment's Miss Belterra riverboat casino. Pinnacle Entertainment currently anticipates that repairs to the riverboat will be completed in October 2000 and that the Belterra Casino Resort will open on October 23, 2000.

Other amendments to the merger agreement implemented in connection with the tentative settlement include:

(3) a reduction in the amount of the termination fee which Pinnacle Entertainment is obligated to pay under certain circumstances from $25 million to $20 million;

(4) extensions of the deadlines set forth in the merger agreement for approval of the proposed merger by Pinnacle Entertainment's stockholders to October 13, 2000 and for the closing of the sale of Pinnacle Entertainment's 97 acres of surplus land in Inglewood, California (in which event stockholders may be entitled to receive up to an additional $1.00 per share in the proposed merger) from December 31, 2001 to March 1, 2002;

(5) addition of a provision permitting Pinnacle Acquisition Corporation ( a subsidiary of PH Casino Resorts), at its option, to extend the outside closing date of the proposed merger to March 16, 2001 (in which event the two-month and six-month extensions of such outside closing date for regulatory approvals run from such date);

and (6) elimination of the requirement that the surviving entity in the merger obtain a letter of credit to secure its obligation to pay the contingent payment of up to $1.00 per share in connection with the sale of the Inglewood land. PH Casino Resorts has also agreed that the merger consideration payable to Pinnacle Entertainment stockholders would not be reduced as a result of the Belterra riverboat accident.

In addition to amending the Merger Agreement, Pinnacle Entertainment also agreed in the settlement to pay attorney's fees and costs to the plaintiff's counsel, subject to court approval.

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