Aztar
Encyclopedia
Aztar Corporation is a hospitality company that focused on resort
hotel
s and casino
s. In 2005, the company had revenues of more than $915 million and earnings before interest and taxes of $212 million. During 2006 the company became the subject of a bidding war for ownership, with Columbia Sussex
winning.
split its businesses, selling the hotel/restaurants to Hong Kong based New World Development Company for $540 million. The casinos including the Tropicana Atlantic City
and the Tropicana Las Vegas
were spun off into a new publicly traded company called Aztar Corporation.
In 1995 the new Aztar Corporation expanded its operations to include riverboat casinos in Caruthersville, Missouri
and Evansville, Indiana
. On March 5, 2002 Aztar acquired full ownership of the 34 acres (137,593.2 m²) Tropicana location in Las Vegas by purchasing the 50% share held by Chicago's Jaffe family. During 2005, the company acquired a site in Allentown, Pennsylvania
with the intention of securing a gaming license and then developing a casino.
On March 13, 2006, Aztar announced plans to be acquired by Pinnacle Entertainment
for $2.1 billion. Subsequent bids were made by Colony Capital, LLC, Columbia Sussex
and Ameristar Casinos
. As of April 26, 2006, all four companies were engaged in bidding over Aztar, with Pinnacle increased its bid to $45 per share, matching Ameristar's bid; Columbia Sussex had previously bid $47 per share. Later, Columbia Sussex increased its bid to $50 a share, all in cash. Aztar management determined on May 1 that the latest bid was preferred over Pinnacle's late increase to $48 a share, in cash and stock.
On May 4, 2006, Ameristar announced that it was pulling out of the bidding for Aztar. Additionally, Colony has apparently lost interest, having failed to increase its bid beyond $41 a share and making no public comment for several weeks. Since Columbia Sussex eventually outbid Pinnacle, the latter company was paid a $50 million termination fee
plus expenses, which may total $16 million.
Bidding ended on May 19, 2006 with the acceptance of a $2.75 billion bid from Columbia Sussex. Columbia Sussex paid a $313 million breakup fee in advance, in case the deal fell through with $78 million of that used to pay the breakup fee to Pinnacle Entertainment.
The sale was approved by the Nevada Gaming Commission
on November 16, 2006, and shortly thereafter by regulators in New Jersey
and Indiana
.
On December 4, 2007, the New Jersey Division of Gaming Enforcement recommended to the Casino Control Commission that it approve the relicensing of the Tropicana and find Columbia Sussex suitable as an owner with a few provisos. Under the recommendation, the casino license would be for only one year instead of the customary five years, and the Tropicana would have to provide New Jersey regulators with advance notice of proposed layoffs, disclose any of the company's gaming violations in other states, report details of its debt agreements, and maintain an independent audit committee. On December 12, 2007, the New Jersey Casino Control Commission rejected this recommendation by a 4 to 1 vote and denied the application of renewal for the Tropicana casino. The commission cited the management's "abysmal" regulatory compliance as well as a "lack of business ability...financial responsibility...and a lack of good character, honesty, and integrity." The property was immediately placed in control of a trustee - New Jersey State Supreme Court Justice Gary Stein - until the property can be sold. This is only the second time in 29 years that the commission has denied a license renewal. Lawyers are expected to appeal. The casino will continue to operate, but it will be under the supervision of a trustee.
The hotel and casino remain open and operations will not be affected.
The company was a wholly owned subsidiary of Columbia Sussex
until May 5, 2009 when it received approval from a Delaware Bankruptcy Court to reorganize and emerge from bankruptcy with the bondholders taking control of the company. Under the terms of the court approved agreement, which requires approval from gaming regulators in New Jersey, Nevada, Indiana
, Louisiana
and Mississippi
, the company will be split in two. One part would be the Tropicana Resort and Casino. The other part would own the remaining casinos.
Resort
A resort is a place used for relaxation or recreation, attracting visitors for holidays or vacations. Resorts are places, towns or sometimes commercial establishment operated by a single company....
hotel
Hotel
A hotel is an establishment that provides paid lodging on a short-term basis. The provision of basic accommodation, in times past, consisting only of a room with a bed, a cupboard, a small table and a washstand has largely been replaced by rooms with modern facilities, including en-suite bathrooms...
s and casino
Casino
In modern English, a casino is a facility which houses and accommodates certain types of gambling activities. Casinos are most commonly built near or combined with hotels, restaurants, retail shopping, cruise ships or other tourist attractions...
s. In 2005, the company had revenues of more than $915 million and earnings before interest and taxes of $212 million. During 2006 the company became the subject of a bidding war for ownership, with Columbia Sussex
Columbia Sussex
Columbia Sussex is a private hospitality company based in Crestview Hills, Kentucky. The company, owned by the Yung family, owns and operates hotels in various parts of the United States. , the company operated 73 hotels under 13 different brands. The current president is William J...
winning.
History
In 1989 Ramada Inns, Inc.Ramada
Ramada is a hotel chain owned and operated by Wyndham Worldwide.- History :The lodging chain was founded in 1953 by longtime Chicago restaurateur Marion W...
split its businesses, selling the hotel/restaurants to Hong Kong based New World Development Company for $540 million. The casinos including the Tropicana Atlantic City
Tropicana Casino Resort Atlantic City
The Tropicana Casino & Resort Atlantic City is a luxury hotel, casino, and spa resort located on Brighton Avenue and the Boardwalk in Atlantic City, New Jersey. It is owned by Tropicana Entertainment and is one of the largest hotels in New Jersey with just over 2,000 rooms...
and the Tropicana Las Vegas
Tropicana Resort & Casino
Tropicana Las Vegas is located on the Las Vegas Strip, in the township of Paradise, Nevada. It is owned by Tropicana Las Vegas Hotel and Resort Inc. and operated by Alex Yemenidjian's Armenco Holdings. It offers 1,658 rooms and is attached to a casino...
were spun off into a new publicly traded company called Aztar Corporation.
In 1995 the new Aztar Corporation expanded its operations to include riverboat casinos in Caruthersville, Missouri
Caruthersville, Missouri
Caruthersville is the most populous city and county seat of Pemiscot County, located along the Mississippi River in the bootheel of southeastern Missouri in the United States. The population was 6,760 at the 2000 census.-History:...
and Evansville, Indiana
Evansville, Indiana
Evansville is the third-largest city in the U.S. state of Indiana and the largest city in Southern Indiana. As of the 2010 census, the city had a total population of 117,429. It is the county seat of Vanderburgh County and the regional hub for both Southwestern Indiana and the...
. On March 5, 2002 Aztar acquired full ownership of the 34 acres (137,593.2 m²) Tropicana location in Las Vegas by purchasing the 50% share held by Chicago's Jaffe family. During 2005, the company acquired a site in Allentown, Pennsylvania
Allentown, Pennsylvania
Allentown is a city located in Lehigh County, Pennsylvania, in the United States. It is Pennsylvania's third most populous city, after Philadelphia and Pittsburgh, and the 215th largest city in the United States. As of the 2010 census, the city had a total population of 118,032 and is currently...
with the intention of securing a gaming license and then developing a casino.
On March 13, 2006, Aztar announced plans to be acquired by Pinnacle Entertainment
Pinnacle Entertainment
Pinnacle Entertainment Inc. is a gaming and hospitality company based in the Las Vegas Valley, Nevada that was created in 1938. It owns and operates casinos in the United States and Argentina.- Company names over time :...
for $2.1 billion. Subsequent bids were made by Colony Capital, LLC, Columbia Sussex
Columbia Sussex
Columbia Sussex is a private hospitality company based in Crestview Hills, Kentucky. The company, owned by the Yung family, owns and operates hotels in various parts of the United States. , the company operated 73 hotels under 13 different brands. The current president is William J...
and Ameristar Casinos
Ameristar Casinos
Ameristar Casinos, Inc. is a casino operator based in Paradise, an unincorporated township in Clark County, Nevada, United States in the Las Vegas metropolitan area. The company has eight properties in seven markets, including four in the United States’ largest 30 metropolitan markets.The company...
. As of April 26, 2006, all four companies were engaged in bidding over Aztar, with Pinnacle increased its bid to $45 per share, matching Ameristar's bid; Columbia Sussex had previously bid $47 per share. Later, Columbia Sussex increased its bid to $50 a share, all in cash. Aztar management determined on May 1 that the latest bid was preferred over Pinnacle's late increase to $48 a share, in cash and stock.
On May 4, 2006, Ameristar announced that it was pulling out of the bidding for Aztar. Additionally, Colony has apparently lost interest, having failed to increase its bid beyond $41 a share and making no public comment for several weeks. Since Columbia Sussex eventually outbid Pinnacle, the latter company was paid a $50 million termination fee
Termination fee
A termination fee is a charge levied when a party wants to break the term of an agreement or long-term contract. They are stipulated in the contract or agreement itself, and provide an incentive for the party subject to them to abide by the agreement....
plus expenses, which may total $16 million.
Bidding ended on May 19, 2006 with the acceptance of a $2.75 billion bid from Columbia Sussex. Columbia Sussex paid a $313 million breakup fee in advance, in case the deal fell through with $78 million of that used to pay the breakup fee to Pinnacle Entertainment.
The sale was approved by the Nevada Gaming Commission
Nevada Gaming Commission
The Nevada Gaming Commission is a Nevada state governmental agency involved in the regulation of casinos throughout the state, along with the Nevada Gaming Control Board. It was founded in 1959 by the Nevada Legislature....
on November 16, 2006, and shortly thereafter by regulators in New Jersey
New Jersey
New Jersey is a state in the Northeastern and Middle Atlantic regions of the United States. , its population was 8,791,894. It is bordered on the north and east by the state of New York, on the southeast and south by the Atlantic Ocean, on the west by Pennsylvania and on the southwest by Delaware...
and Indiana
Indiana
Indiana is a US state, admitted to the United States as the 19th on December 11, 1816. It is located in the Midwestern United States and Great Lakes Region. With 6,483,802 residents, the state is ranked 15th in population and 16th in population density. Indiana is ranked 38th in land area and is...
.
On December 4, 2007, the New Jersey Division of Gaming Enforcement recommended to the Casino Control Commission that it approve the relicensing of the Tropicana and find Columbia Sussex suitable as an owner with a few provisos. Under the recommendation, the casino license would be for only one year instead of the customary five years, and the Tropicana would have to provide New Jersey regulators with advance notice of proposed layoffs, disclose any of the company's gaming violations in other states, report details of its debt agreements, and maintain an independent audit committee. On December 12, 2007, the New Jersey Casino Control Commission rejected this recommendation by a 4 to 1 vote and denied the application of renewal for the Tropicana casino. The commission cited the management's "abysmal" regulatory compliance as well as a "lack of business ability...financial responsibility...and a lack of good character, honesty, and integrity." The property was immediately placed in control of a trustee - New Jersey State Supreme Court Justice Gary Stein - until the property can be sold. This is only the second time in 29 years that the commission has denied a license renewal. Lawyers are expected to appeal. The casino will continue to operate, but it will be under the supervision of a trustee.
The hotel and casino remain open and operations will not be affected.
The company was a wholly owned subsidiary of Columbia Sussex
Columbia Sussex
Columbia Sussex is a private hospitality company based in Crestview Hills, Kentucky. The company, owned by the Yung family, owns and operates hotels in various parts of the United States. , the company operated 73 hotels under 13 different brands. The current president is William J...
until May 5, 2009 when it received approval from a Delaware Bankruptcy Court to reorganize and emerge from bankruptcy with the bondholders taking control of the company. Under the terms of the court approved agreement, which requires approval from gaming regulators in New Jersey, Nevada, Indiana
Indiana
Indiana is a US state, admitted to the United States as the 19th on December 11, 1816. It is located in the Midwestern United States and Great Lakes Region. With 6,483,802 residents, the state is ranked 15th in population and 16th in population density. Indiana is ranked 38th in land area and is...
, Louisiana
Louisiana
Louisiana is a state located in the southern region of the United States of America. Its capital is Baton Rouge and largest city is New Orleans. Louisiana is the only state in the U.S. with political subdivisions termed parishes, which are local governments equivalent to counties...
and Mississippi
Mississippi
Mississippi is a U.S. state located in the Southern United States. Jackson is the state capital and largest city. The name of the state derives from the Mississippi River, which flows along its western boundary, whose name comes from the Ojibwe word misi-ziibi...
, the company will be split in two. One part would be the Tropicana Resort and Casino. The other part would own the remaining casinos.
Casinos at time of acquisition
- Tropicana Casino Resort Atlantic CityTropicana Casino Resort Atlantic CityThe Tropicana Casino & Resort Atlantic City is a luxury hotel, casino, and spa resort located on Brighton Avenue and the Boardwalk in Atlantic City, New Jersey. It is owned by Tropicana Entertainment and is one of the largest hotels in New Jersey with just over 2,000 rooms...
- Atlantic City, New JerseyAtlantic City, New JerseyAtlantic City is a city in Atlantic County, New Jersey, United States, and a nationally renowned resort city for gambling, shopping and fine dining. The city also served as the inspiration for the American version of the board game Monopoly. Atlantic City is located on Absecon Island on the coast... - Tropicana Resort & CasinoTropicana Resort & CasinoTropicana Las Vegas is located on the Las Vegas Strip, in the township of Paradise, Nevada. It is owned by Tropicana Las Vegas Hotel and Resort Inc. and operated by Alex Yemenidjian's Armenco Holdings. It offers 1,658 rooms and is attached to a casino...
- Paradise, NevadaParadise, NevadaParadise is an unincorporated town in the Las Vegas metropolitan area in Clark County, Nevada, United States. The population was 223,167 at the 2010 census... - Ramada Express Hotel and Casino - Laughlin, NevadaLaughlin, NevadaLaughlin is a census-designated place in Clark County, Nevada, United States, and a port located on the Colorado River. Laughlin is south of Las Vegas, located in the far southern tip of Nevada. It is best known for its gaming, entertainment, and water recreation. As of the 2010 census, the...
- Casino Aztar EvansvilleCasino Aztar EvansvilleCasino Aztar, located in downtown Evansville, Indiana, was the first riverboat casino in the state of Indiana, United States. The casino is owned and operated by Tropicana Entertainment which purchased original owner Aztar Corporation in 2007....
- Evansville, IndianaEvansville, IndianaEvansville is the third-largest city in the U.S. state of Indiana and the largest city in Southern Indiana. As of the 2010 census, the city had a total population of 117,429. It is the county seat of Vanderburgh County and the regional hub for both Southwestern Indiana and the... - Casino Aztar Caruthersville - Caruthersville, MissouriCaruthersville, MissouriCaruthersville is the most populous city and county seat of Pemiscot County, located along the Mississippi River in the bootheel of southeastern Missouri in the United States. The population was 6,760 at the 2000 census.-History:...