{"id":5842,"date":"2011-02-28T13:13:56","date_gmt":"2011-02-28T21:13:56","guid":{"rendered":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/?p=5842"},"modified":"2020-10-12T07:27:40","modified_gmt":"2020-10-12T15:27:40","slug":"power-shift-at-ameristar","status":"publish","type":"post","link":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/power-shift-at-ameristar\/","title":{"rendered":"Power shift at Ameristar"},"content":{"rendered":"

\"\"No longer will the Craig H. Neilsen Foundation<\/strong> be calling the shots at Ameristar Casinos<\/strong>. The financial needs of the nonprofit have led Ameristar Chairman Ray Neilsen<\/strong> to liquidate 83% of the foundation’s stake in ASCA<\/a> for an above-market $17.50. The planned sellback would see Ameristar repurchase 44% of its shares for a $458 million tab. Wall Street<\/strong> didn’t jump for joy at the news, as Ameristar went into a steep dive at the start of trading and hasn’t pulled out yet. (You might say the announcement is going over about as well as James Franco<\/strong>‘s Academy Awards<\/strong> hosting gig did.)<\/p>\n

A concurrent borrowing of $2.1 billion is expected to retire $1.5 billion in existing debt, cover the stock repurchase — and leave $200 million in working capital. The buyback implies a $1 billion-plus price tag for all outstanding Ameristar stock …. a bargain compared to the $2.27 billion the company would fetch were it priced at seven times cash flow. And with EBITDA 7% off 2009’s performance, Ameristar might be an attractive acquisition, were it not for existing or anticipated adversity in four of the company’s six primary markets.<\/p>\n

\"\"Ameristar’s assets are still<\/strong> a mostly complementary fit to those of Boyd Gaming<\/strong> but the latter is cautious and probably won’t pursue Ameristar with so much near-term uncertainty beclouding the future. That would include the impact Penn National Gaming<\/strong>‘s Kansas Speedway<\/strong> casino will have on Ameristar’s performance in Kansas City<\/strong>, not to mention traffic disruptions both in Indiana<\/strong> and now (for a two-year period) in St. Charles<\/strong>, Missouri<\/strong>, normally an ASCA cash cow. I’m sure gluttonous Caesars Entertainment<\/strong> would devour Ameristar if it could, but good luck selling that idea to Wall Street.<\/p>\n

\"\"CEO as Svengali.<\/strong> It says much of the persuasive powers of CEO Gary Loveman<\/strong> that he was able to serve an empty sandwich<\/a> to Wall Streeet in the company’s latest earnings announcement and have it described as though it were filet mignon<\/a>. The company’s bottom line dipped back into the red, as revenue grew a meager 1%. Caesars’ (painfully) obvious frugality arguably narrowed that loss, if a one-time gain is backed out of 2009’s numbers. Strip revenue nudged up $30 million in the last quarter of 2010, growth achieved by dint of adding<\/a> Planet Hollywood<\/strong>, it would appear<\/a>. Lack of greater detail prevents one from ascertaining whether Caesars is achieving even its small annual revenue increase on a same-story basis but one suspects that, on average, it isn’t.<\/p>\n

The listlessness Caesars execs perceive in the Vegas economy extends throughout much of their empire. Even with a plethora of regional casinos, the company is treading water. Local journalists report that the fourth-quarter announcement is intended, in part, to chum the waters for another IPO attempt. Pay no attention, Wall Street, to the $18 billion-plus in long-term debt behind the curtain.<\/p>\n

But I’m confident the Ferris wheel will turn everything around<\/a>. By the way, there’s no longer a Las Vegas Monorail<\/strong> behind Imperial Palace<\/strong> in that rendering. Does Caesars know something we don’t?<\/p>\n","protected":false},"excerpt":{"rendered":"

No longer will the Craig H. Neilsen Foundation be calling the shots at Ameristar Casinos. The financial needs of the nonprofit have led Ameristar Chairman Ray Neilsen to liquidate 83% of the foundation’s stake in ASCA for an above-market $17.50. … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[40,60,7,68,45,53,39,69,6,9,100,38],"tags":[],"_links":{"self":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/5842"}],"collection":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/comments?post=5842"}],"version-history":[{"count":5,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/5842\/revisions"}],"predecessor-version":[{"id":28123,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/5842\/revisions\/28123"}],"wp:attachment":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/media?parent=5842"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/categories?post=5842"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/tags?post=5842"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}