From staff reports.

Ameristar Casinos Inc. today said it has offered about $1.5 billion in cash to acquire Aztar Corp., a Phoenix-based casino operator, trumping previous offers from Pinnacle Entertainment Inc. and Colony Capital LLC.

The Las Vegas-based casino company, which operates Ameristar Casino-Hotel in Vicksburg, said it had offered $42 a share. That is $1 a share higher than the current top offer for Aztar.

In a sign investors expect the bidding will continue higher, Aztar shares rose $2.96, or 7.1 percent, to $44.95 in morning trading on the New York Stock Exchange. Ameristar Casinos shares were falling at mid-morning.

Aztar agreed in March to be bought out by Pinnacle for $38 per share in cash, and reportedly received a $41-per-share offer from real estate investment fund Colony Capital later that month.

Ameristar said the deal is &#8220clearly superior to Pinnacle’s and Colony’s,” and the combined operations would form the fifth-largest public owner and operator of gambling properties in the United States.

It would also give Ameristar properties in Las Vegas and Atlantic City. The company now has seven casinos in six markets, including Vicksburg, but no casinos in the nation’s two largest gambling destinations.

Aztar owns the Tropicana hotel-casinos in Las Vegas and Atlantic City as well as casinos in Missouri and Indiana not now served by Ameristar.

The combined businesses would generate about $2 billion in annual revenue, with roughly 21,000 slot machines, 650 table games and 7,000 hotel rooms.

Ameristar was privately founded in Jackpot, Nev., and was family held until November 1993 when a percentage of shares was offered in public trading.

&#8220Ameristar is prepared to enter into a merger agreement that, apart from providing superior value to Aztar’s shareholders, would be substantially identical to Aztar’s merger agreement with Pinnacle,” it said in a statement.

The company said its proposal would not be subject to financing conditions, and it would expect to complete the deal by year-end, comparable to Pinnacle’s timetable.

Ameristar said it expects the transaction, if approved, would &#8220immediately and substantially” boost its earnings per share. Analysts expect the company to earn $1.33 per share for 2006, according to a poll by Thomson Financial.

Ameristar’s Vicksburg property is being expanded for the fourth time since it opened in February 1994. A multilevel parking garage now being built is expected to be followed by a second hotel for a total cost of about $150 million.