Boyd and Coast in $1.3 Billion Merger

Boyd Gaming Corporation , a major, diversified casino gaming operator, and
Coast Casinos, Inc., a leader in the Las Vegas locals sector, today
announced that the two companies have entered into a definitive merger
agreement. Under the agreement, which was unanimously approved by the
Boards of both companies, Coast will become a wholly-owned subsidiary of
Boyd Gaming and will be positioned in Boyd as a separate operating unit
run by current Coast management. On a fully-diluted basis, Coast
shareholders will receive approximately $495 million in cash, and Boyd
will issue approximately 19.4 million shares to Coast shareholders.
The stock consideration is valued at approximately $325 million based upon
Boyd’s 10-day average daily closing stock price for the period ended
February 5, 2004. In addition, Boyd will assume approximately $460 million
of Coast debt. The merger is anticipated to be immediately accretive to
Boyd’s earnings per share.

The combination creates one of the most diversified casino companies in
the country with 17 casino entertainment facilities, Boyd’s pending
acquisition of Harrah’s Shreveport, and Coast’s development of South
Coast, located in the growing residential area south of Las Vegas, where
construction is expected to begin in the second quarter of 2004. Boyd’s
successful Sam’s Town property, a long-time Las Vegas locals landmark,
will join Coast’s three successful local properties, Gold Coast, Suncoast
and the recently expanded Orleans, to create a significant presence in the
dynamic and growing Las Vegas locals sector. The combined company will
also be represented in Las Vegas with two properties well-positioned on
the Las Vegas Strip, Coast’s Barbary Coast and Boyd’s Stardust. After the
merger, Boyd Gaming expects to generate about half of its pro forma EBITDA
from its Nevada operations. Boyd Gaming is also a significant operator in
four states in the Midwest and South and operates Borgata, a new, dramatic
destination resort in Atlantic City that it owns with MGM MIRAGE.

Boyd Gaming recently announced the acquisition of Harrah’s hotel casino in
Shreveport, Louisiana for $190 million and expects to close that
transaction in the second quarter of 2004. The Company also said recently
that it has begun the planning process for an expansion of Borgata in
areas where there has been strong demand for its amenities.

Boyd believes that the value of the merger represents approximately 7.4
times Coast’s estimated 2004 EBITDA. The two companies, combined on a pro
forma basis, estimate that 2004 revenues would be approximately $2.0
billion.

William S. Boyd, Chairman and Chief Executive Officer of Boyd Gaming,
said, “We are extremely pleased that our two companies have agreed to this
transforming combination. With Coast, Boyd becomes a leader in the highly-
coveted Las Vegas locals sector while maintaining its significant presence
in major gaming markets throughout the United States. The combined company
will have promising development opportunities in Las Vegas and throughout
the country. This merger brings into focus a clear growth strategy and
creates one of the most diversified gaming companies in the industry.”

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Boyd continued, “Coast and Boyd are a natural fit. Coast’s loyal and
committed management team and workforce will be a great complement to our
own outstanding management team and employee base. I have known Michael
Gaughan for nearly 40 years, both personally and professionally, and he is
one of the industry’s most respected business leaders. When it comes to
understanding and operating in the Las Vegas locals sector, most would
agree that Michael is among the best in the business. I am especially
pleased that Michael and the Coast senior management team have agreed to
remain with Boyd following completion of the transaction and will continue
to run Coast’s operations with the same dedicated employees who have made
Coast a success.”

Michael J. Gaughan, Chairman and Chief Executive Officer of Coast Casinos,
Inc., said, “This is the right transaction at the right time for Coast and
our employees. I have great respect for Boyd Gaming and its management
team. Bill Boyd is among the most respected leaders this industry has ever
seen. Our fathers worked together in Las Vegas nearly fifty years ago, and
I am delighted to have the two of us come together at this time. Our
employees will benefit from being part of a strong, more diversified
organization. My team and I are delighted to be joining Boyd Gaming, and,
as I am about to become a significant shareholder of the combined company,
I am committed to the future of Boyd and its exciting growth
opportunities.”

Boyd Gaming’s Board of Directors will be expanded from 11 to 13 directors
and, under the agreement, Coast Casinos will have the right to designate
three directors, including Michael Gaughan.

The transaction is subject to receipt of approvals of the shareholders of
both companies, gaming and other government and regulatory approvals and
other customary closing conditions. Shareholders of Coast, representing
approximately 56% of the voting power of Coast shares, have agreed for a
period of two years to vote their shares in favor of the Boyd merger and
against any other combination. The transaction is expected to be completed
immediately upon receipt of necessary third party approvals, all of which
are expected to be received by mid-2004.

Deutsche Bank acted as financial advisor to Boyd Gaming and Cravath,
Swaine & Moore LLP acted as legal advisor. Banc of America Securities LLC
acted as financial advisor to Coast Casinos, Inc., and Gibson Dunn &
Crutcher LLP acted as legal advisor.


There will be an analyst / investor teleconference today, February 9,
2004, at 10:00 AM EST to discuss the transaction. The analyst / investor
teleconference can be monitored via the World Wide Web at
http://www.boydgaming.com/ .

Based in Las Vegas, Coast Casinos, Inc. owns and operates four Las Vegas
hotel-casinos: The Orleans, the Gold Coast Hotel and Casino, the Suncoast
Hotel and Casino and the Barbary Coast Hotel and Casino. Coast Casinos is
currently developing a fifth property, the South Coast Hotel and Casino,
south of Las Vegas, which is currently expected to open in the fourth
quarter of 2005. For more information on Coast Casinos, please visit the
Company’s website at: http://www.coastcasinos.com/ .

Headquartered in Las Vegas, Boyd Gaming Corporation is a leading
diversified owner and operator of 13 gaming entertainment properties
located in Nevada, New Jersey, Mississippi, Illinois, Indiana and
Louisiana. Boyd Gaming recently opened Borgata Hotel, Casino and Spa at
Renaissance Pointe (AOL keyword: borgata or http://www.theborgata.com/ ),
a $1.1 billion entertainment destination hotel in Atlantic City, through a
joint venture with MGM MIRAGE. The Company also is awaiting regulatory
approval of its acquisition of Harrah’s Shreveport, which is expected in
the second quarter 2004. Boyd Gaming press releases are available at
http://www.prnewswire.com/. Additional news and information on Boyd Gaming
can be found at http://www.boydgaming.com/ .
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