FTC challenges Pinnacle's bid to buy Ameristar
WASHINGTON (Reuters) - The Federal Trade Commission said on Wednesday it filed a complaint aimed at stopping casino operator Pinnacle Entertainment Inc (PNK.N) from buying rival Ameristar Casinos Inc ASCA.O because the merger would reduce competition and lead to higher prices for customers in St. Louis and Lake Charles, Louisiana.
In its complaint, the FTC said the deal's value was $2.8 billion because Pinnacle will pay $869 million for Ameristar's outstanding stock and assume $1.9 billion in debt.
Pinnacle's properties include seven casinos, two racetracks and the Heartland Poker Tour, according to its web site. Ameristar owns eight casinos, the FTC said.
Both companies have or soon will have casinos around Lake Charles, Louisiana, and St. Louis, Missouri, which means that the deal would reduce the number of casino owners in the area, potentially leading to higher prices and worse service for customers, the FTC said.
Pinnacle disagreed with the FTC's analysis of the deal.
"The merger of these two gaming-entertainment property portfolios would not have any adverse effect on competition in any of the geographies in which the combined company would operate," Anthony Sanfilippo, CEO of Pinnacle Entertainment, said in a statement.
Ameristar declined to comment.
The FTC will challenge the proposed transaction by arguing its case before an internal FTC judge. It has also authorized its staff to seek a court order preventing the deal from closing.
(Reporting by Diane Bartz; Editing by Ros Krasny, Gerald E. McCormick and Jan Paschal)
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