TSC Staff
Shares of Ameristar Casinos (ASCA Quote - Cramer on ASCA - Stock Picks) surged Monday after the sudden death of its chairman, CEO and majority shareholder prompted speculation that the gaming company may be taken over.
The stock recently was up $4.77, or 19%, to $30.45, on heavy volume. Ameristar said early Monday that Craig Neilsen unexpectedly passed away in his sleep over the weekend. The company named President John Boushy as its new CEO. Ray Neilsen, vice president of operations and Craig Neilsen's son, was named co-chairman, along with Gordon Kanofsky. Craig Neilsen had been Ameristar's chairman and CEO since the company's inception in 1993. A car crash in the 1980s left him paralyzed, and he was an activist for spinal cord injury research. Neilsen's estate plan provides for his stock to be transferred to his private foundation, the Craig H. Neilsen Foundation, which focuses on spinal cord injury research and treatment. Ray Neilsen and Kanofsky are serving as co-trustees of the foundation. According to Ameristar, Craig Neilsen's desire was for the foundation to retain a controlling interest in the company for the long term. He owned about 58% of the company's stock. "Craig was very well prepared in all of his business transactions, and this is no exception," said Kanofsky in a press release. "He thoughtfully laid the foundation for the future ownership and management of the company." Shares of Ameristar have run up lately after a takeover bid for Harrah's (HET Quote - Cramer on HET - Stock Picks) heightened speculation about buyouts in the gaming industry. One large investor in the stock told TheStreet.com last month that Neilsen would be very averse to selling Ameristar because it's such a big part of his life. This same investor, however, said he bought the stock because he believed that a takeover was likely if the CEO died.
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