UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of Report (Date of earliest event reported): March 26, 1997
AMERISTAR CASINOS, INC.
(Exact name of registrant as specified in its charter)
Nevada 0-22494 88-0304799
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation or Number)
organization)
3773 Howard Hughes Parkway
Suite 490 South
Las Vegas, Nevada 89109
(Address of principal executive offices and Zip Code)
(702) 567-7000
(Registrant's telephone number, including area code)
P.O. Box 92200
Henderson, Nevada 89009
(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS.
On March 26, 1997, the Registrant issued a press release
(the "Press Release") announcing (i) the commencement of an
arbitration proceeding against the former stockholders of Gem
Gaming, Inc. ("Gem"), which was acquired by the Registrant
through a merger in October 1996, (ii) the postponement by the
Registrant's bank lenders of a previously-scheduled closing of an
increased bank credit facility due to uncertainties related to
the form and amount of merger consideration payable by the
Registrant to the Gem stockholders and (iii) a delay in the
construction of the Registrant's casino-hotel project, The
Reserve, in Henderson, Nevada, until adequate financing can be
obtained.
The Press Release is filed herewith as an exhibit to this
Report. The Press Release is hereby incorporated by reference
into this Report.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) and (b) Financial Statements and Pro Forma Financial
Information.
None.
(c) Exhibits.
20.1 Press Release of Ameristar Casinos, Inc. dated
March 26, 1997
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the undersigned registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
AMERISTAR CASINOS, INC.
(Registrant)
Date: March 27, 1997
By: /s/ THOMAS M. STEINBAUER
Thomas M. Steinbauer,
Senior Vice President and
Chief Financial Officer
INDEX TO EXHIBITS
Exhibit Method of Filing
20.1 Press Release of Ameristar Filed electronically herewith.
Casinos, Inc. dated March 26, 1997.
EXHIBIT 20.1
AMERISTAR CASINOS, INC.
3773 Howard Hughes Parkway, Suite 490S
Las Vegas, Nevada 89109
702-567-7000 -- Fax: 702-369-8860
FOR IMMEDIATE RELEASE
CONTACT: Tom Steinbauer, Senior Vice President of Finance --
(702) 567-7000
DATE: Mar. 26, 1997
AMERISTAR CASINOS COMMENCES ARBITRATION PROCEEDING
AGAINST GEM GAMING STOCKHOLDERS RELATING TO MERGER
AGREEMENT; UNCERTAINTIES POSTPONE COMPLETION OF
FINANCING FOR CONSTRUCTION OF THE RESERVE
LAS VEGAS -- Ameristar Casinos, Inc. announced today that it has
commenced an arbitration proceeding against Steven W. Rebeil and
Dominic J. Magliarditi, the former stockholders of Gem Gaming,
Inc. ("Gem"), for breaches of the Merger Agreement by which Gem
was merged in October 1996 into a wholly owned subsidiary of
Ameristar and for breaches of the implied covenant of good faith
and fair dealing related to the merger. Due to uncertainties
related to the Merger Agreement, Ameristar's bank lenders have
postponed the completion of an increase in Ameristar's bank
credit facility from $94.5 million to $175 million that was
scheduled to close this week. Pending the resolution of these
uncertainties to the satisfaction of the bank lenders or the
availability of alternative financing, Ameristar will delay
construction on The Reserve casino-hotel in Henderson, Nev.,
which it acquired under construction through the Gem merger.
Under the terms of the Merger Agreement, as amended in
September 1996, the Gem stockholders were to receive the net
proceeds, less certain agreed-upon reductions of approximately
$4 million, of an underwritten public offering of 7.5 million
shares of Ameristar common stock to be completed by June 1, 1997.
The Merger Agreement provides that if the offering is not
completed by June 1, 1997, the Gem stockholders would receive
three-year 8% promissory notes in a principal amount equal to
7.5 million multiplied by the average closing price of Ameristar
common stock during the last 10 trading days of May 1997, less
the agreed-upon reductions. The Merger Agreement does not
provide for a minimum amount of merger consideration and does not
give the Gem stockholders the right to elect the form of merger
consideration.
Ameristar's complaint alleges that the Gem stockholders have
wrongfully and in bad faith interfered with and impeded
Ameristar's contemplated stock offering because they believed the
stock offering would result in a lesser amount of merger
consideration than the alternative promissory notes. Ameristar
alleges, for example, that notwithstanding covenants in the
Merger Agreement to cooperate to effect the offering, Rebeil has
refused to approve a prominent national underwriter (Bear,
Stearns & Co. Inc.) proposed by Ameristar to lead the offering
and has categorically refused to approve the engagement of any
other underwriter to lead the offering (including several other
national underwriters interviewed by Ameristar and the Gem
stockholders), and the Gem stockholders have threatened to bring
suit to scare off potential underwriters and otherwise preclude
the offering. Ameristar alleges that these actions effectively
have thwarted Ameristar's ability to consummate the offering.
Ameristar is seeking damages from the Gem stockholders and
declaratory relief to establish the amount and terms of payment
of the merger consideration in light of the conduct of the Gem
stockholders.
Shortly before the scheduled closing of Ameristar's new
$175 million bank credit facility, Wells Fargo Bank, N.A., the
lead lender and agent for the credit facility, advised Ameristar
that the banks could not proceed with the closing of the credit
facility due to uncertainties relating to the form and amount of
merger consideration payable to the Gem stockholders. Pending
further developments, Wells Fargo Bank has agreed to make an
additional unsecured loan to Ameristar in the amount of
$20 million, the proceeds of which will be used to repay short-
term indebtedness, to pay the costs to complete the redesign of
The Reserve and current construction activities and for other
working capital purposes. Ameristar expects this short-term loan
to be repaid upon the completion of an increase of its existing
revolving credit facility with Wells Fargo Bank and other banks.
In the absence of the new credit facility or other
financing, Ameristar will complete certain construction work
currently in progress on The Reserve and delay further
construction on the project. Limited construction has taken
place since September 1996 while Ameristar completed plans to
expand and enhance The Reserve and sought financing for the
project. The redesign of The Reserve is substantially complete,
and, in connection with the anticipated closing of the increased
credit facility, Ameristar had intended to announce the details
of the redesigned project, including an expected opening in
February 1998 and a budget of approximately $125 million,
including previous expenditures.
Notwithstanding the dispute with the Gem stockholders and
the delay of The Reserve project, Ameristar believes that it will
have adequate liquidity and capital resources to continue to meet
its obligations, including payments on indebtedness, and that
these events will not have any material impact on the operation
of Ameristar's existing casino properties in Jackpot, Nev.,
Vicksburg, Miss. and Council Bluffs, Ia. This forward-looking
statement assumes the completion of the contemplated increase of
Ameristar's existing bank credit facility and the absence of any
other unforeseen factors beyond Ameristar's control, including
adverse changes in its business or operating revenues.
Accordingly, actual results may differ materially from those
currently anticipated.
"We regret that the uncertainties related to the Merger
Agreement force us to delay construction on The Reserve," said
Craig H. Neilsen, Ameristar's president and CEO. "We intend to
hold the Gem stockholders accountable for their actions, which
have resulted in substantial damage to Ameristar," Mr. Neilsen
continued. "We will make every effort to proceed with the
construction of The Reserve as soon as possible. We remain
confident in the ultimate success of The Reserve."
Ameristar Casinos, Inc., a Las Vegas-based publicly traded
company (Nasdaq-NMS ticker: ASCA) with a strong background in
the gaming and hospitality industry dating back to 1954, owns and
operates Cactus Petes and The Horseshu in Jackpot, Nev.,
Ameristar Casino Vicksburg in Vicksburg, Miss. and Ameristar
Casino Council Bluffs in Council Bluffs, Ia. across the Missouri
River from Omaha, Neb. Ameristar also owns The Reserve, a safari-
themed casino-hotel, under construction in Henderson, Nev. in
metropolitan Las Vegas.
