S&P puts Ameristar on negative watch

Standard & Poor's said it placed Ameristar Casinos Inc.'s BB corporate credit rating and BB+ bank loan rating on CreditWatch with negative implications following Ameristar's announcement that it had launched an unsolicited bid to acquire Aztar Corp. Based on the current proposed terms of $42 per share, the transaction values Aztar at $2.25 billion in cash, including the assumption of about $723 million in Aztar's debt. At Dec. 31, Ameristar had about $780 million of debt outstanding.

Pro forma lease-adjusted debt to EBITDA could increase to well above levels currently expected over the near term as a result of the cash offer, the agency said, and the proposal follows Pinnacle Entertainment Inc.'s merger agreement to acquire the company for $38 per share and Colony Capital LLC's proposal to acquire the company for $41 per share.

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