Boyd Ups Ante for Station Casinos - TheStreet



) --

Boyd Gaming

(BYD) - Get Report

made a $2.45 billion offer Wednesday for bankrupt

Station Casinos


The non-binding offer would include a cash payment and the assumption of some debt.

Station Casinos, one of Boyd's biggest rivals in the local Las Vegas market, rejected a prior offer of $950 million from Boyd earlier in the year.

Station Casinos sought bankruptcy protection in July after its owners, the Fertittas, had trouble servicing the $3.3 billion in debt they assumed when they acquired the company for $8.8 billion in 2007. The casino operator was granted a four-month extension from the U.S. Bankruptcy Court in Reno, Nev. to submit a reorganization plan. It now has until March 25.

Privately-held Station Casinos owns and operates 18 casinos in Las Vegas.

"Boyd has no significant pipeline, apart from its mothballed Echelon project; conversely, Station has a vast array of undeveloped projects, including four tribal agreements," Chris Snow, analyst at CreditSights, wrote in a note. "With Station slogging through bankruptcy, the company has no effective access to capital to provide momentum to any of these projects and this could change with Boyd's backing."

Boyd has about $2 billion in available credit that was originally earmarked for the Echelon project.

While acquiring Station Casinos would give Boyd a greater share of the Las Vegas market, Snow says it also poses a financial risk for Boyd.

With the opening of

MGM Mirage's

(MGM) - Get Report

CityCenter yesterday, the Vegas market is also experiencing increasing supply. On top of that, the economic downturn has made demand nearly non-existent.

-- Reported by Jeanine Poggi in New York.

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