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Ameristar Casinos


is plunging after it announces that it is taking itself off the market.

The regional casino operator said Tuesday that after its board evaluated a potential sale, it decided that it would neither be in the best interest of the company nor its stockholders. The committee will continue to look at other potential strategic alternatives.

"We would expect this news to serve as a near-term negative for the regional gaming space given what is apparently a lack of interest from private equity in Ameristar," Wells Fargo analyst Carol Santarelli wrote in a note.

"The issue for a potential buyer is that Ameristar already has among the highest property-level EBITDA margins in the industry and runs a tight ship, which therefore could make it difficult to generate much operating upside other than removing duplicate costs in the corporate expense line," J.P. Morgan analyst, Joseph Greff, wrote in a note.

Greff does not expect Ameristar to do much with its free cash flow and believes it will likely revisit a potential sale of assets rather than the whole portfolio.

Shares of Ameristar lost 10% to $16.09 in morning trading Tuesday.

--Written by Jeanine Poggi in New York.

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