Casino operator gets $4.7b buyout offer

December 05, 2006|Associated Press

LAS VEGAS -- Private equity bidders extended their shopping spree for casino companies yesterday as Station Casinos Inc. said it received a $4.7 billion buyout offer from its founding family and an affiliate of Colony Capital LLC.

The $82-per-share offer for the Las Vegas-based company, backed by chief executive Frank J. Fertitta III and president Lorenzo Fertitta, represented an 18.7 percent premium to Friday's closing price.

Station shares shot above the mark, rising $15.80, or nearly 23 percent, to close at $84.90 on the New York Stock Exchange after peaking earlier in the day at a 52-week high of $85.19.

Analysts predicted that the offer might go higher and that interest by private equity groups in the gambling sector, rich in cash flows and real estate, would continue.

The bid for Station follows a $15.05 billion offer for industry leader Harrah's Entertainment Inc., announced Oct. 2 by two private equity firms, Texas Pacific Group and Apollo Management Group.

Billionaire Kirk Kerkorian's investment firm, Tracinda Corp., also confirmed yesterday its previously announced intention to increase its stake in MGM Mirage Inc. to 61.1 percent from 55.9 percent with a tender offer of $825 million in cash.