Boyd Gaming (BYD) Sends Letter of Interest to Station Casinos

February 23, 2009 4:05 PM EST

Boyd Gaming Corporation (NYSE: BYD) delivered a non-binding preliminary indication of interest (the "Indication of Interest") to the Board of Directors of Station Casinos, Inc.

The full text of the Indication of Interest delivered to Station follows:

February 23, 2009

Board of Directors
Station Casinos, Inc.
1505 South Pavilion Center Drive
Las Vegas, NV 89135

Attention: Frank J. Fertitta III, Chairman, President and Chief Executive
Officer

Dear Frank:

Boyd Gaming Corporation is pleased to submit this non-binding preliminary indication of interest with respect to Station Casinos, Inc.


Transaction
Boyd is interested in exploring an acquisition of 100% of the OpCo Assets. In addition, should the Company determine to pursue sale transactions with respect to the PropCo Assets, we would consider an acquisition that includes those assets as well. The terms "OpCo Assets" and "PropCo Assets" are defined below under the heading "General."

Rationale
We believe that Boyd is uniquely qualified to operate the assets of Station. We are dedicated to operating first class casino entertainment facilities and have demonstrated this commitment within the Las Vegas market for over thirty years.

Key Assumptions and Value Drivers
This letter is based on publicly available information. We have made numerous assumptions concerning the OpCo Assets, the PropCo Assets and the Land Loan (defined below under the heading "General"). These assumptions include continued operation of the business in the ordinary course.

There are certain key drivers and assumptions that may change our views, either positively or negatively, which we plan to further investigate during a formal due diligence process.

Valuation
Based on available public information, we estimate that the enterprise value of the OpCo Assets is approximately $950 million. Subject to the completion of a due diligence review to Boyd's satisfaction, including confirmation of the estimated enterprise value of the OpCo Assets, Boyd would be prepared to offer this amount in cash to existing stakeholders to acquire the OpCo Assets following, or as part of, the reorganization of Station. We believe this value would present a superior recovery to the unsecured creditors of Station versus the current Exchange Offer as outlined in the Company's Form 8-K filed on February 4, 2009. We would be interested in pursing a transaction to acquire the Station assets as either a "stalking horse bidder" pursuant to Section 363 of the Bankruptcy Code or, as a co-sponsor or plan proponent (with Station or other applicable debtor) in a consensual plan of reorganization or, in the alternative, as a competing plan proponent, in each case pursuant to Chapter 11 of the Bankruptcy Code.

Financing
As of December 31, 2008, Boyd had approximately $2 billion in available liquidity under its Revolving Credit Facility. We have sufficient liquidity to finance a cash transaction consistent with the terms outlined in this Proposal.

Boyd Gaming Corporation is a multi-jurisdictional gaming company. [SM]

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