Pinnacle Buys Harrahs Lake Charles
LAS VEGAS, NV, June 1, 2006. Pinnacle Entertainment has signed a definitive agreement under which it will acquire certain Lake Charles, Louisiana gaming assets of Harrah's Entertainment.
The agreement, which formalizes a letter of intent announced on April 17, also calls for the sale of certain of Pinnacle's Casino Magic Biloxi assets to a subsidiary of Harrah's Entertainment. Under the agreement, Pinnacle will acquire two gaming subsidiaries of Harrah's, which own two casino boats, related licenses and permits, and a 263-room hotel.
Harrah's Lake Charles was severely damaged by Hurricane Rita in September 2005.
Harrah's will acquire Pinnacle's Casino Magic Biloxi site and certain related assets, and receive an additional payment of approximately $25 million from Pinnacle.
Casino Magic Biloxi has been closed since being struck by Hurricane Katrina on Aug. 29, 2005, which destroyed the gaming barge and extensively damaged the hotel complex. Each company will retain its insurance claims.
"The purchase of Harrah's Lake Charles will allow us to build on our success at L'Auberge du Lac, which just marked its first-year anniversary and is now the state's leading generator of riverboat gaming revenues," said Daniel R. Lee, Chairman and Chief Executive Officer. "In addition to expanding L'Auberge with a 250-room hotel project, we plan to add another riverboat casino in the Lake Charles area. We are also exploring options for the other license elsewhere in Louisiana. We enjoyed being a part of the Biloxi community for many years and hope to return to Mississippi at some point in the future."
The definitive agreement is subject to receipt of all required regulatory approvals, as well as the passage of a local-option referendum in Lake Charles that the Company anticipates will be on the ballot in late September.
If those conditions are satisfied, the transaction is expected to close in the fourth quarter of 2006.
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