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Ameristar Buyout Talk Heats Up

Shares jump after the estate controlling the stock says it is exploring options.
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Ameristar Casinos (ASCA) may be closer to cashing out.

Shares of the casino operator jumped 11% Monday after the trust that owns a majority of Ameristar's stock said it is exploring options for its stake in the company.

Rumors of a buyout for Ameristar have

swirled around the company since the death of founder Craig Neilsen last year. Neilsen, who owned more than 50% of Ameristar's stock and was its chairman and CEO, was seen as very averse to a company takeover.

Following Neilsen's death, his 31.5 million shares of Ameristar were transferred to an estate in his name. In a regulatory filing Monday, the representatives of the estate said they are in the process of administering the estate and a planned distribution of shares to the Craig H. Neilsen Foundation, a private foundation focused on spinal-cord injury research.

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However, the filing also said that the representatives are empowered to sell the shares and instead distribute proceeds from the sale, rather then the shares themselves. The estate said it is continuing to undertake an evaluation of its alternatives, which could include a merger or stock sale.

"The Co-Representatives may at any time determine with or without additional notice to support or pursue one or more strategic alternatives to maintaining the Estate's current ownership of the Shares, including without limitation engaging in sales of all or part of the Estate's holdings or participating in a transaction or series of transactions or taking other actions with the purpose or effect of influencing or changing control over the Company," the filing said.

In a press release after the filing, Ameristar didn't specifically mention a buyout but played down any prospects for a merger.

"We read the filing to indicate the Estate wishes to preserve various options regarding its holdings in Ameristar stock," said John Boushy, Ameristar's CEO and president. "We continue to operate our business as usual and our management team remains focused on delivering outstanding operating results."

Shares of Ameristar recently were up $2.62 to $27.28. The stock had climbed as high as $29.40 earlier in the session.