Pinnacle Boosts Aztar Bid

Pinnacle Entertainment Inc. increased its bid Wednesday for rival casino owner Aztar Corp. to $1.65 billion, or $43 a common share, but Aztar said a previous offer by hotel and casino owner Columbia Sussex Corp. still looked better.

Pinnacle and Aztar already have a definitive merger agreement in place. Pinnacle said it sweetened the terms to “respond to a third-party proposal.”

Columbia Sussex, a closely held company, has proposed to pay Aztar, owner of the Tropicana hotels in Atlantic City, N.J., and Las Vegas, $47 a share, or more than $1.69 billion.

Columbia’s proposed offer, made through its gaming affiliate Columbia Entertainment, “continues to be reasonably likely to result in a superior proposal,” Aztar said, adding that its board had authorized management to continue talks with Columbia Entertainment.

It noted, however, that Columbia has yet to make a definitive offer.

Phoenix-based Aztar, prized for the 34 acres of land it owns on the Las Vegas Strip, has been the focus of a bidding war among four companies since March, including Columbia, Ameristar Casinos Inc., Colony Capital Acquisitions and Pinnacle.

Steve Scruggs, a portfolio manager for Queens Road Funds, which owns Aztar stock, said it was “hard to make sense” of Pinnacle’s latest offer. “I think we are starting to test the upper limits of reasonable valuations,” he said.

Pinnacle, which first bid $38 a share for Aztar, said its new offer also would pay $454.79 for each share of Aztar’s Series B preferred and would refinance all of Aztar’s outstanding debt.