Pinnacle Entertainment (NASDAQ: PNK ) has reached an agreement in principle with the Bureau of Competition of the Federal Trade Commission that would allow the company to complete its proposed acquisition of Ameristar Casinos (UNKNOWN: ASCA.DL ) , Pinnacle announced today.
Late last month, the FTC issued an administrative complaint saying Pinnacle's proposed $2.8 billion acquisition of competing casino operator Ameristar would violate antitrust law. According to the FTC's announcement at the time of its challenge, an administrative complaint is issued "when it has 'reason to believe' that the law has been or is being violated."
Pinnacle and Ameristar have casinos which directly compete in the St. Louis area and the Lake Charles, La., area. The FTC alleged consumers in those areas would be affected by higher prices and lower quality with the lack of competition.
Pinnacle says that on June 13, FTC Chief Administrative Law Judge D. Michael Chappell granted Pinnacle's and Ameristar's unopposed motion to extend the deadline to respond to the administrative complaint by 30 days. Pinnacle said it intends to sell Ameristar's casino hotel development project in Lake Charles, and Pinnacle's Lumiere Place Casino, HoteLumiere, and the Four Seasons Hotel in St. Louis, subject to gaming regulatory approvals.
The merger would still be subject to the negotiation of a consent order and the approvals of the full FTC and the gaming regulators in the affected locales.