FILED BY BOYD GAMING CORPORATION
PURSUANT TO RULE 425 UNDER THE
SECURITIES ACT OF 1933 AND DEEMED FILED
PURSUANT TO RULE 14A-12 UNDER THE
SECURITIES EXCHANGE ACT OF 1934
SUBJECT COMPANY: COAST CASINOS, INC.
SUBJECT COMPANY SEC FILE NO. 000-26922
FOR IMMEDIATE RELEASE
BOYD GAMING AND COAST CASINOS TO MERGE
IN $1.3 BILLION TRANSACTION
LAS VEGAS, NV - FEBRUARY 9, 2004 - Boyd Gaming Corporation (NYSE: BYD), 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."
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.
ANALYST / INVESTOR TELECONFERENCE INFORMATION
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 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:
www.coastcasinos.com.
Headquartered in Las Vegas, Boyd Gaming Corporation (NYSE: BYD) 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 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 www.prnewswire.com. Additional news and information
on Boyd Gaming can be found at www.boydgaming.com.
# # #
IMPORTANT LEGAL INFORMATION
THIS PRESS RELEASE IS NOT AN OFFER TO SELL THE SECURITIES OF BOYD GAMING
CORPORATION AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE JOINT PROXY
STATEMENT/PROSPECTUS REGARDING THE PROPOSED TRANSACTION WHEN IT BECOMES
AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. The joint proxy
statement/prospectus will be filed with the U.S. Securities and Exchange
Commission by Boyd Gaming Corporation and Coast Casinos, Inc. Investors and
security holders may obtain a free copy of the joint proxy statement/prospectus
when it becomes available and other documents filed or furnished by Boyd Gaming
Corporation or Coast Casinos, Inc. with the SEC at the SEC's website at
www.sec.gov. The joint proxy statement/prospectus and other documents filed or
furnished by Boyd Gaming Corporation or Coast Casinos, Inc. may also be
obtained for free by directing a request to Boyd Gaming Corporation, Attn: Rob
Stillwell, Investor Relations, 2950 Industrial Road, Las Vegas, NV 89109 or to
Coast Casinos, Inc., Attn: Gage Parrish, 4500 West Tropicana Avenue, Las Vegas,
NV 89103.
Boyd Gaming, Coast Casinos and their respective officers and directors may be
deemed to be participants in the solicitation of proxies with respect to the
transactions contemplated by the merger agreement. Information about the
participants in the solicitation will be set forth in the joint proxy
statement/prospectus to be filed with the SEC.
CAUTION CONCERNING FORWARDING-LOOKING STATEMENTS: This press release contains
certain "forward-looking statements" within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. These statements are based on
management's current expectations and are naturally subject to uncertainty and
changes in circumstances. Actual results may vary materially from the
expectations contained herein. The forward-looking statements contained herein
include statements about the proposed transaction. The following factors,
among others, could cause actual results to differ materially from those
described herein: failure to obtain certain regulatory approvals; actions of
the federal and local governments; failure of the requisite number of Boyd
Gaming Corporation or Coast Casinos, Inc. stockholders to approve the proposed
transaction; the inability to successfully integrate the businesses of Boyd
Gaming Corporation and Coast Casinos, Inc.; the costs related to the merger;
the inability to achieve cost-cutting synergies resulting from
the merger; changing consumer or marketplace trends; the general economic
environment; potential or actual litigation; and other economic, business,
competitive and/or regulatory factors affecting businesses generally. More
detailed information about those factors is set forth in filings made by Boyd
Gaming Corporation and Coast Casinos, Inc. with the SEC. Neither Boyd Gaming
Corporation nor Coast Casinos, Inc. is under any obligation to (and expressly
disclaims any such obligation to) update or alter its forward-looking
statements whether as a result of new information, future events or otherwise.
CONTACTS:
For Boyd Gaming and Coast Casinos:
Financial Media
Ellis Landau Rob Stillwell
1-702-792-7210 1-702-792-7353
robstillwell@boydgaming.com
Dan Katcher / Matt Sherman
Joele Frank, Wilkinson Brimmer Katcher
1-212-355-4449
SATELLITE UPLINK FOR BOYD GAMING B-ROLL:
Monday, February 9, 2004
11:30 AM - 12:00 PM (EST)
KU-Band SBS 6: Transponder 2
Downlink Frequency: 11749mhz vertical
Monday, February 9, 2004
3:30 PM - 4:00 PM (EST)
KU-Band SBS 6: Transponder 2
Downlink Frequency: 11749mhz vertical
If you have questions or problems with the B-Roll satellite feeds, call Bret
Curran at 1-212-627-5622.