Exhibit 99.1
PINNACLE ENTERTAINMENT ANNOUNCES STRATEGIC AGREEMENT TO
INVEST $95 MILLION IN ASIAN COAST DEVELOPMENT LTD.
INVEST $95 MILLION IN ASIAN COAST DEVELOPMENT LTD.
- Investment Includes Management Agreement Through 2058 for Second Integrated Resort of Ho Tram
Strip Project in Vietnam -
Strip Project in Vietnam -
- Expands Pinnacle’s Development Pipeline Into Rapidly Growing Asian Gaming Market -
- Conference Call to Discuss Investment in ACDL: Today at 9:00 a.m. ET/6:00 a.m. PT,
(888) 792-8395, Passcode 70936396 or www.pnkinc.com -
(888) 792-8395, Passcode 70936396 or www.pnkinc.com -
LAS VEGAS, May 26, 2011 — Marking its entry into the rapidly growing Asian gaming market, Pinnacle
Entertainment (NYSE: PNK) announced today that it has entered into a subscription agreement to
acquire a 26% equity interest in Asian Coast Development (Canada) Ltd. (ACDL), the owner and
developer of the Ho Tram Strip beachfront complex of destination integrated resorts and residential
developments in southern Vietnam, in exchange for a $95 million investment in ACDL securities.
Upon the closing of the transaction, Pinnacle will enter into a management agreement through 2058
(with the potential for a 20-year extension) for the second integrated resort of the multi-phase Ho
Tram Strip destination resorts project located approximately 80 miles southeast of Ho Chi Minh
City, Vietnam’s largest city which attracts the majority of Vietnam’s 5 million tourists each year.
The transaction documents provide for proportional representation on ACDL’s board of directors and
are subject to customary closing conditions.
The Ho Tram Strip will be Vietnam’s first destination integrated resort and gaming complex and is
scheduled to open in multiple phases. The multi-property resort complex is being developed by ACDL
under an investment certificate from the Government of Vietnam, the first of its kind. The planned
first resort of the Ho Tram Strip, MGM Grand Ho Tram, is currently under construction with a
planned opening in 2013, and will be managed by MGM Hospitality, a subsidiary of MGM Resorts
International. The first phase of the MGM Grand Ho Tram will feature 541 luxury guest rooms and
suites, a full spectrum of world-class restaurants and amenities, exquisite VIP accommodations, a
conference center, and a spectacular entertainment area featuring 90 live table games and 500
electronic games.
The second integrated resort of the Ho Tram Strip, for which Pinnacle has secured a management
agreement, will be jointly developed by Pinnacle and ACDL, and owned by ACDL. Pinnacle and ACDL
expect that the second integrated resort, which will be branded as a distinct and premium resort,
will be similar in project scope to the MGM Grand Ho Tram resort that is currently under
construction.
“Our investment in ACDL and long-term management agreement for the second integrated resort bring
meaningful strategic benefits to Pinnacle, including further diversification and potentially very
significant returns on invested capital,” said Anthony Sanfilippo, President and Chief Executive
Officer of Pinnacle Entertainment.
“The phenomenal success and continued strong growth of destination integrated resort and gaming
facilities in Asian markets are indicative of the demand for quality gaming entertainment options
in Asia. We believe this region, when measured by gaming positions per available population, has
strong growth potential, especially when compared to more mature markets. In addition to the
attractiveness of the Asian gaming market, this opportunity in Vietnam offers many appealing
characteristics, including an anticipated tax structure competitive with other Asian markets with
integrated resorts and high, steadily increasing tourism levels in and around Ho Chi Minh City and
Ba Ria-Vung Tau Province, which make the Ho Tram Strip development the ideal project for Pinnacle
to participate in the growth of this region.
“We are delighted to be a part of Vietnam’s strategic vision for the further development of its
tourist industry, an investor in ACDL and a partner on the Ho Tram Strip project,” continued Mr.
Sanfilippo. “Featuring luxurious amenities in a breathtaking oceanfront location, the Ho Tram
Strip is sure to attract guests from throughout Asia. We look forward to working collaboratively
with ACDL, Lloyd Nathan and the rest of their management team to develop the Ho Tram Strip.”
“This transaction is another major milestone for ACDL and accelerates the development of our second
resort and the entire Ho Tram site. Importantly, it builds critical mass at Ho Tram, brings a
second highly respected operator into close partnership with ACDL, and enhances our plans for
further growth and expansion,” said Lloyd Nathan, Chief Executive Officer of Asian Coast
Development (Canada) Ltd. “We now have two of the world’s leading gaming companies managing our
integrated resorts in Vietnam, confirming Ho Tram as the next large-scale destination opportunity
after Macau and Singapore. As a result of this transaction, we also now have the backing of two
substantial institutional and corporate sponsors, Harbinger Capital Partners and Pinnacle
Entertainment.”
Mr. Nathan added, “Pinnacle joins a strong Ho Tram Strip development team, including MGM
Hospitality. We look forward to working with Anthony Sanfilippo and everyone at Pinnacle on the
creation of the premier gaming and leisure destination in Southeast Asia.”
“Pinnacle Entertainment brings tremendous operating expertise and vision to ACDL, and we are
pleased to welcome them,” said Philip A. Falcone, Chief Executive Officer of Harbinger Capital
Partners, a leading private investment fund and ACDL’s majority investor. “We are excited about
the growing list of world class operators and development partners that have joined the Ho Tram
project, and we look forward as Lloyd Nathan and the ACDL team continue to build on this
transaction and realize the immense potential of the Ho Tram Strip opportunity.”
“We are delighted to see critical mass being created at Ho Tram and look forward to welcoming our
new neighbors,” said Gamal Aziz, President and CEO of MGM Hospitality. “This transaction is an
important endorsement for Vietnam’s growing profile as a world-class tourism destination, and we
look forward to opening the MGM Grand Ho Tram in 2013.”
Carlos Ruisanchez, Executive Vice President and Chief Financial Officer of Pinnacle Entertainment,
said, “This agreement is an excellent example of Pinnacle’s strategy to utilize our sound financial
condition and significant free cash flow to invest in return-focused growth opportunities. The
economies of Vietnam and many of the nearby surrounding countries are among the fastest growing in
the world, and consumers in this region continue to demonstrate a strong propensity to visit
quality integrated resort properties. We believe the characteristics of the Vietnam market, the
uniqueness of the Ho Tram Strip project, our ability to participate as an owner and manager of the
integrated resort, and the significant potential for gaming growth in the region will result in a
very solid return on our investment.”
Investor Conference Call
Pinnacle will hold a conference call for investors today, Thursday, May 26, 2011, at 9:00 a.m. ET
(6:00 a.m. PT) to discuss its investment in ACDL. Investors may listen to the call by dialing
(888) 792-8395 or, for international callers, (706) 679-7241. The code to access the conference
call is 70936396. Investors may also listen to the conference call live over the Internet at
www.pnkinc.com. A slide presentation that management will review during the conference call can
also be accessed via the “Investor Relations” section at www.pnkinc.com.
A replay of the conference call will be available shortly after the conclusion of the call through
June 9, 2011 by dialing (800) 642-1687 or, for international callers, (706) 645-9291. The code to
access the replay is 70936396. The conference call will also be available for replay at
www.pnkinc.com.
About Asian Coast Development (Canada) Ltd.
Asian Coast Development (Canada) Ltd. (ACDL) is an international development company specializing
in integrated resort destinations. ACDL, through its wholly-owned subsidiary Ho Tram Project
Company Ltd, is the developer of the Ho Tram Strip, a group of integrated resorts to be located on
more than 400 acres of land and more than two kilometers of pristine beach in Ho Tram, and approved
in an Investment Certificate issued by the Government of Vietnam. With a focus on providing a
personalized blend of excitement and relaxation, the Ho Tram Strip will feature something for
everyone, from lavish entertainment to premium shopping and exceptional recreational facilities.
In November 2008, ACDL entered into an Agreement with MGM Resorts International to provide
pre-opening services and to manage and operate the first of ACDL’s five resorts under the MGM Grand
brand. This will be Vietnam’s first large scale integrated resort and ultimately will include an
1,100-room, five-star MGM Grand hotel, a world-class entertainment facility, restaurants, high-tech
meeting space, an exclusive VIP area, a championship golf course, as well as a variety of
beach-front recreation activities. Phase I of this development is scheduled to open in 2013 and
will be the initial component of the largest integrated resort complex in Vietnam. For more
information about ACDL, please visit www.asiancoastdevelopment.com.
About Pinnacle Entertainment
Pinnacle Entertainment, Inc. owns and operates seven casinos, located in Louisiana, Missouri,
Indiana and Nevada, and a racetrack in Ohio. The Company is also developing L’Auberge Casino &
Hotel Baton Rouge, which is scheduled to open in the summer of 2012. In May 2011, Pinnacle entered
into an agreement to acquire a 26% ownership stake in Asian Coast Development Ltd. (ACDL), an
international development and real estate company currently developing Vietnam’s first large-scale
integrated resort. For more information about Pinnacle Entertainment, please visit www.pnkinc.com.
About Harbinger Capital Partners
Harbinger Capital Partners is a multi-billion dollar private investment fund based in New York
which employs a fundamental approach to investing. Harbinger Capital Partners is led by Philip A.
Falcone who has been the Chief Executive Officer and Chief Investment Officer of funds affiliated
with or managed by Harbinger Capital Partners since 2001. Mr. Falcone has more than 20 years of
investment experience across an array of market cycles.
All statements included in this press release, other than historical information or statements
of historical fact, are “forward-looking statements” within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These
forward-looking statements, including statements regarding the closing of the transaction documents
(which are subject to customary closing conditions), about the Ho Tram Strip, the projected opening
date for MGM Grand Ho Tram, expected construction budgets and amenities for the phases of the Ho
Tram Strip project, potential growth for ACDL and potential growth of the gaming markets in Vietnam
and throughout Asia, the completion of the second integrated resort of the Ho Tram Strip and the
expected returns of the Company’s investment in ACDL, are subject to risks, uncertainties and
changes in circumstances that could significantly affect the Company’s future financial results and
business. Accordingly, Pinnacle cautions that the forward-looking statements contained herein are
qualified by important factors that could cause actual results to differ materially from those
reflected by such statements. Such factors include, but are not limited to: (a) the Company may
experience delays in closing the transaction or fail to complete the transaction due to
circumstances beyond its control, including ACDL’s inability to complete certain customary
conditions provided for under its credit agreement; there can be no assurance that the transaction
will in fact close; (b) the global financial crisis may have an impact on ACDL’s or the Company’s
business and financial condition in ways that the Company currently cannot accurately predict; (c)
significant competition in the gaming industry could adversely affect ACDL’s or the Company’s
profitability; (d) many factors, including the escalation of construction costs beyond increments
anticipated in construction budgets, could prevent ACDL from completing its Ho Tram development
project within budget and on time and as required by the conditions of its certificate in Vietnam;
(e) ACDL will have to obtain all necessary approvals for completing the Ho Tram development
project, including gaming and regulatory approvals, some of which are beyond its control; and (f)
other risks, including those as may be detailed from time to time in the Company’s filings with the
Securities and Exchange Commission (“SEC”). For more information on the potential factors that
could affect the Company’s financial results and business, review the Company’s filings with the
SEC, including, but not limited to, its Annual Report on Form 10-K, its Quarterly Reports on Form
10-Q and its Current Reports on Form 8-K.
| CONTACT: | ||
Investor Relations
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Public Relations | |
Lewis Fanger
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Kerry Andersen | |
Vice President, Finance & Investor Relations
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Director, Community & Public Relations | |
702/541-7777 or investors@pnkmail.com
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337/395-7631 or kandersen@ldlmail.com | |
Richard Land, Jim Leahy |
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Jaffoni & Collins Incorporated |
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212/835-8500 or |
