Ameristar Casinos, Inc.
announced today that it has signed an agreement with Windsor Woodmont
Black Hawk Resort Corp. to acquire Mountain High Casino in Black Hawk,
Colorado for approximately $115 million, plus the assumption of Windsor
Woodmont’s liability for the approximately $2.4 million principal amount
of outstanding Black Hawk Business Improvement District Bonds. Windsor Woodmont will also be entitled to receive contingent payments
during the four-year period following the closing of the acquisition equal
to 10% of the property’s earnings before interest, taxes, depreciation and
amortization (EBITDA) for each year in excess of $17.5 million prior to
the opening of a hotel on the property, and 10% of EBITDA for each year in
excess of $24 million following the opening of a hotel (with EBITDA
calculated to exclude any charges attributable to the development and
construction of the hotel).
Windsor Woodmont is currently operating as a debtor-in-possession in a
pending Chapter 11 case before the United States Bankruptcy Court for the
District of Colorado. Ameristar’s acquisition of Mountain High Casino will
form the basis of Windsor Woodmont’s amended plan of reorganization. The
Ad Hoc Committee of certain holders of Windsor Woodmont’s first mortgage
notes has agreed to support the amended plan of reorganization.
Closing of the acquisition is subject to the confirmation of the amended
plan of reorganization by the Bankruptcy Court, the receipt of gaming
regulatory approvals, the expiration of the waiting period under the Hart-
Scott-Rodino Antitrust Improvements Act and other customary closing
conditions. Subject to the satisfaction of these conditions, closing is
expected to occur in the fourth quarter of 2004. Ameristar plans to
finance the purchase out of available cash, through an increase in the
borrowing capacity under its senior credit facilities, through the
issuance of debt securities or a combination thereof.
Mountain High Casino is an upscale, integrated gaming and entertainment
facility located in the center of the Black Hawk gaming district,
approximately 40 miles west of Denver, Colorado. It is the largest casino
in Colorado, with approximately 425,000 square feet, 57,000 of which is
currently used for gaming. The property features approximately 1,000 slot
machines and 24 table games (including poker), a steak and seafood
restaurant, a buffet and food court, a 5,000 square-foot entertainment
showroom that seats approximately 500 and a parking garage with space for
approximately 800 vehicles, among other amenities.
Ameristar intends to make a number of significant capital improvements to
the property, including the construction of a 300-room AAA Four Diamond-
quality hotel and additional covered parking, reconfiguration and
expansion of the gaming area, the addition and replacement of food and
beverage outlets, enhancement of the entertainment showroom and the
introduction of cashless slot technology and other gaming equipment
upgrades. These projects, which are key to the rebranding of the property
under the Ameristar flag, are anticipated to cost approximately $75
million and are expected to occur in stages during the three years
following Ameristar’s acquisition of the property.
“We are very excited about the opportunity to acquire Mountain High
Casino,” said Craig H. Neilsen, President and CEO of Ameristar. “Mountain
High is a high-quality property with an attractive and distinctive design
and an excellent location in one of the major gaming markets in the United
States. We have carefully studied the facility’s operations and are
confident that the physical improvements that we plan to make, along with
the implementation of our proven operating strategies, will enable us to
realize an attractive return on our investment, consistent with those of
our other market-leading facilities. The acquisition will also add to the
geographic diversification of our portfolio and, given our strong
financial position, will not impact our ability to continue our recently
instituted cash dividend policy or to pursue other development
We will hold a conference call to discuss this transaction at 2:00 p.m.
Eastern Time on June 2, 2004. The call can be accessed live by calling
(888) 208-1812. It can be replayed until June 9, 2004 at 2:00 p.m. Eastern
Time by calling (888) 203-1112 and using the access code number 450135.