LAS VEGAS – Casino operator Station Casinos Inc. (STN) said Monday it received a $4.7 billion acquisition offer from a group including its chief executive and president.
Las Vegas-based Station said it created a special committee of independent directors to evaluate the offer and review any rival buyout proposals but that no decision had been made.
The management-backed offer from chief executive Frank J. Fertitta III and president Lorenzo Fertitta, along with an affiliate of Colony Capital LLC, for $82 a share in cash, represented an 18.7 percent premium to Friday's closing price.
But Station Casinos shares climbed above the offered price in midday trading, rising $13.96, or 20.1 percent, to $83.06 on the New York Stock Exchange.
The company said Fertitta Colony Partners LLC made the offer Friday, saying it wanted to acquire all of Station's outstanding common stock. The buyout group said it has financing commitments sufficient to consummate the deal.
The brothers Frank and Lorenzo Fertitta, along with Blake and Delise Sartini, collectively hold a 27 percent stake in the company.
Colony Capital is a Los Angeles-based real estate investment firm founded by Tom Barrack, with casino holdings including Kerzner International, Resorts Atlantic City, Accor Casinos, Harveys Casino Resorts and the Atlantic City Hilton and Las Vegas Hilton.
The group provided equity funding commitments, Station said. Deutsche Bank Trust Co. Americas and German American Capital Corp. have provided debt financing commitments.
Morgan Stanley analyst Celeste Brown said the offer was fair, but added a higher bid could be expected.
"The company has discussed the stock being worth $90 to $100, and investors may have a similar expectation, hence we may see pressure for a higher price," she said, but added, "it would be difficult to match a bid including management."
The Fertitta family founded Station Casinos in 1976 and took the company public in 1993. It since grew from one property to 16, including several neighborhood casinos in the Las Vegas area such as the Red Rock Casino Resort that opened this year in northeast. Most include movie theaters and entertainment venues.
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.