Colony Capital Bids for Tropicana Owner Aztar

Colony Capital bid $41 a share for Tropicana casino operator Aztar Corp. on Thursday, topping an earlier offer by Pinnacle Entertainment Corp.

Colony, owner of the Raffles hotel group and the Las Vegas and Atlantic City Hilton hotel-casinos, made the offer in a letter to Aztar’s board, spokesman Alan Marcus said.

On March 13, Pinnacle offered $38 a share, or $1.45 billion, and agreed to assume $723 million in debt.

The deal would expand Colony’s collection of hotels and give it access to one of the last undeveloped sites on the Las Vegas Strip. Aztar owns the Tropicana, which sits on a 34-acre parcel that Pinnacle Chief Executive Daniel Lee said last month was “really the last great site” in the gaming town.

“It potentially makes a lot of sense because if you look at Aztar’s assets in Las Vegas, you have an unparalleled location,” said Michael Pollock, a casino analyst with Spectrum Group.

Aztar spokesman Joe Cole declined to comment.

Shares of Aztar rose $3.37, or 8.6%, to $42.42. Pinnacle shares rose 23 cents to $29.23.

Pinnacle made the Aztar offer to move into Las Vegas and Atlantic City, where it doesn’t operate any properties.

Pinnacle owns the Belterra Casino Resort & Spa in Belterra, Ind.; L’Auberge de Lac Hotel & Casino in Lake Charles, La.; and Boomtown casinos in Bossier City, La., New Orleans and Reno. It also has casinos in Argentina and an application pending to open two in Chile.

Los Angeles-based Colony was founded in 1991 by Thomas Barrack, a former principal in Robert M. Bass Group, the investment vehicle of the Texas billionaire.

In addition to the Tropicana in Las Vegas and Atlantic City, Aztar runs the Ramada Express Hotel & Casino in Laughlin, Nev.; Casino Aztar in Caruthersville, Mo.; and Casino Aztar in Evansville, Ind.