Harveys deal off | TahoeDailyTribune.com

Harveys deal off

Susan Wood

After failing to iron out a financing agreement, Harveys Casino Resorts has terminated the planned $1.28 billion purchase of Pinnacle Entertainment, Inc., a gaming company based in Glendale, Calif.

Talks of the buyout stalled last month when the Stateline casino delayed plans to sell $675 million of high-yield securities to finance the purchase. Pinnacle shares fell 28 percent when the deal was temporarily called off.

The casino kept the door open for the deal when it announced on Jan. 12 that it would extend the negotiation period that ends today.

In April, Harveys agreed to buy Pinnacle for $24 a share plus $650 million of debt. Investors in the debt market began demanding higher yields on corporate debt amid rising corporate defaults and concerns about the economy, according to a Bloomberg report.

The merger would have combined Pinnacle’s Boomtown and Casino Magic chains in Mississippi, Louisiana, Nevada and Argentina. Lake Tahoe-based Harveys also owns casinos in Council Bluffs, Iowa and Central City, Colo.

Harveys Senior Vice President of Corporate Sales and Marketing Jim Rafferty and its parent company Colony Capital’s spokesman, Owen Blicksilver, have declined to comment on the matter.

“There were a number of factors that went into the decision, but we’re not willing to elaborate on them,” Blicksilver told a Bloomberg reporter.

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