Las Vegas-based Herbst Gaming pushed into Northern Nevada’s casino market
Wednesday, agreeing to a $148 million purchase of Sands Regent, which
operates four casinos including the Sands Regency in Reno. The transaction,
in which privately held Herbst Gaming would buy the outstanding shares of
publicly-traded Sands Regent for $15 a share, is subject to approval by
gaming regulators and Sands Regent stockholders. The company hopes to close
the purchase by year’s end. The deal would give Herbst Gaming control of 12
casinos in Nevada, Missouri and Iowa. Herbst Gaming now operates eight
casinos, including the off-Strip Terrible’s Casino on East Flamingo Road,
two casinos in Pahrump, one in Henderson and one in Searchlight. Herbst
Gaming is also one of the state’s largest slot machine-route operators with
more than 8,400 games in noncasino locations such as grocery stores,
drugstores, convenience stores, bars and restaurants. Herbst Gaming General
Counsel Sean Higgins said the slot-route operation has included locations
throughout Northern Nevada for several years. “This transaction will enable
Herbst to further broaden and diversify its geographic presence within the
state of Nevada and its cash flows as well as create cross-marketing and
other growth opportunities.” Herbst Gaming Chairman Edward Herbst said in a
statement. Once the deal closes, the four Sands Regent casinos — Sands
Regency, Gold Ranch in Verdi, Rail City in Sparks and Depot in Dayton —
would be operated as a Herbst Gaming subsidiary. The current Sands Regent
management is expected to remain with Herbst and manage the properties. “We
believe this transaction delivers excellent value to our shareholders and
creates increased opportunities for growth and development for our
employees, who will benefit from being part of a larger and more diversified
gaming company,” Sands Regent President Ferenc Szony said. The news sent
shares of Sands Regent up 6.34 percent in trading on the Nasdaq National
Market Wednesday. The company’s stock price closed at $14.70, up 88 cents.
Herbst Gaming, which has public debt, began in 1987 as an offshoot of the
family business, Terrible Herbst Oil Co., which operates more than 80
all-inclusive service stations in Nevada, California and Arizona. The
stations offer gasoline pumps, convenience stores, oil and lube services and
car washes. The gaming operations have grown steadily over the past few
years, beginning with maintaining and repairing the slot machines in the
Terrible Herbst stores. In February 2005, the company bought a Midwest
casino operator, which included the St. Jo Frontier in St. Joseph, Mo., Mark
Twain Casino in LaGrange, Mo., and the Lakeside Casino in Osceola, Iowa.
Terrible’s Casino in Las Vegas is undergoing a renovation that will expand
the casino and add a second hotel tower and a parking garage.