Deadline for Pinnacle deal extended

Wednesday, Jan. 17, 2001 | 11:34 a.m.

Harveys Casino Resorts of Lake Tahoe said it extended the deadline for its planned acquisition of Pinnacle Entertainment Inc. to Jan. 31.

Monday was the original deadline Harveys faced in closing the $1.3 billion buyout, but Harveys said its merger agreement gives it the right to select "one or more" new termination dates at its own discretion. California-based Pinnacle is the operator of the Boomtown and Casino Magic chains, with properties in Mississippi, Louisiana, Indiana and Nevada.

The Pinnacle deal encountered serious difficulty in December, when Harveys affiliate PH Casino Resorts Inc. pulled a $625 million offering of 10-year junk bonds that were to be used to help finance the buyout. Observers said the deal was pulled because poor junk bond market conditions made it impossible for PH Casino Resorts to get the 11.75 percent interest rate it had sought.

Harveys said it "intends to continue to evaluate the prospects for the transaction, but cannot assure that a transaction will be consummated."

Harveys is controlled by Colony Capital of Los Angeles.