Ameristar Casinos, Inc. (NASDAQ - GS: ASCA) today announced that it will follow through with a transaction during the second quarter of 2011 to purchase 26,150,000 shares of Ameristar common stock from the Estate of Craig H. Neilsen at a price of $17.50 per share for a total of $457,625,000. Neilsen was the founder and former Chairman and CEO of Ameristar.
The purchase will drain all but 17 percent of Ameristar's outstanding shares from the estate and Ameristar will no longer be a controlled company under NASDAQ listing rules.
To finance the purchase, Ameristar will seek $2.1 billion in new debt financing and use $1.5 billion to retire existing indebtedness. So, retire $1.5 billion, take on $2.1 billion at better terms and repurchase most of the outstanding shares. Nice!
Whatever Ameristar is currently doing with their casinos seems to be working. The fourth quarter of 2010 marked its second consecutive quarter of year-over-year net revenue growth. In addition, "the Company reported consolidated Adjusted EBITDA and Adjusted EPS (each as defined and reconciled in the Company's press release dated February 9, 2011) of $77.5 million and $0.19, respectively, both increases over the prior year period."
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