Ameristar Casinos Mulls Sale of Company

Ameristar Casinos Inc., the Las Vegas-based owner of Ameristar Casino Hotel Kansas City, has confirmed that it is considering “strategic alternatives to enhance stockholder value,” including a possible sale of the company.

Its Kansas City property is one of eight casinos Ameristar (Nasdaq: ASCA) owns in seven markets, which include near St. Louis, Chicago, Omaha, Denver and others. Ameristar Casino Hotel Kansas City is the local market share leader, having reported July revenue of $22.54 million, up 7 percent.

Ameristar Casinos said Wednesday that it does not plan to disclose developments of the strategic alternatives process unless its board determines that “there is a material need to update the market.” A transaction isn’t a sure thing, the company said.

Ameristar hired Lazard and Bank of America Merrill Lynch as its financial advisers, and Gibson Dunn & Crutcher LLP as its legal adviser to help the board’s transaction committee in its evaluation.

The gaming and entertainment business, founded in 1954, has been a public company since late 1993.

On Aug. 4, Ameristar reported losing $24.9 million during the second quarter, swinging to a loss from prior-year earnings of $14.3 million. The company’s revenue for the quarter, which ended June 30, dropped 5 percent to $293 million.

For the first half of 2010, the company reported a $14.2 million loss. However, it said it was optimistic about the performance of more stable markets such as Kansas City, which posted $14.4 million in operating income during the quarter, though both that and revenue declined from prior-year levels.

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