Station Casinos agrees to be taken private for $5.4 billion

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Casino-owner Station Casinos Inc. on Monday said it agreed to be acquired by a private equity group that includes key members of its founding family for about $5.4 billion.

The group known as Fertitta Colony Partners LLC offered $90 per
share for the casino and is an 8 percent premium over its closing price of $83.30 a share on Friday.

The group sweetened an earlier bid of $82 a share made Dec. 4. Since then, the share price has shot above that mark, and some shareholders sued shortly after the first offer was announced, saying the bid was too low.

Under the latest deal, Station can solicit acquisition proposals from third parties for 30 days.

Fertitta Colony Partners was formed by two Station Casinos executives, Chairman and Chief Executive Frank J. Fertitta III and Vice Chairman and President of Lorenzo J. Fertitta, and Colony Capital Acquisitions LLC, part of Colony Capital LLC.

Fertitta will also assume $3.4 billion in Station Casino's debt as part of the deal.

Station also said it will pay shareholders its regular quarterly dividend of about 29 cents until the deal closes.

Station shares rose $3.70, or 4.4 percent, to $87 in premarket trading on Monday.

Colony Capital already has casino holdings including Kerzner International, Resorts Atlantic City, Accor Casinos and the Atlantic City Hilton and Las Vegas Hilton.

Colony most recently bid for Phoenix-based Aztar Corp., owner of the Tropicana casino-hotels in Las Vegas and Atlantic City, N.J., but walked away this spring when an affiliate of Columbia Sussex Corp. made a higher offer.

Frank Fertitta Jr. founded Station Casinos with a 100-slot-machine gambling parlor and snack bar in 1976, and his sons took the company public in 1993. It has grown to 16 properties, including several Las Vegas-area neighborhood casinos, such as the Red Rock Casino Resort Spa that opened this year in the northeast. Most include movie theaters and food courts to entice local residents.

It also is part owner in the Green Valley Ranch Station Casino in Henderson and manages Thunder Valley Casino near Sacramento, Calif., on behalf of the United Auburn Indian Community.

AP Business Writer Adam Goldman in New York contributed to this

(Copyright 2007 by The Associated Press. All Rights Reserved.)