LAS VEGAS (AP) — In a deal that would more than double its size, Pinnacle Entertainment said Friday that it will buy rival Ameristar Casinos for about $869 million, plus take on $1.9 billion of its debt.
Pinnacle owns seven U.S. casinos and a racetrack, and is developing another gaming property. Ameristar has eight casinos in the United States. The company said buying Ameristar could help it become a bigger player in the gaming industry, while trimming some costs.
U.S. casinos have struggled to recover from the recession as consumers watch spending. Larger U.S. casino companies have increasingly relied on their properties in Asia for profits.
If the deal is approved by shareholders and regulators, Pinnacle will pay $26.50 for each share of Ameristar Casinos Inc. That's a 20 percent premium over the company's Thursday closing stock price of $22.07. It's also gaining $116 million of the company's cash.
Ameristar shares jumped 20 percent to close at $26.50 Friday, while Pinnacle shares rose 21.3 percent to $16.20.