The preemptive strike by the Fertitta brothers to buy out Station Casinos and take the company private would retain local ownership of Nevada’s largest locals casino brand, but could significantly slow the expansion of what has been one of Nevada’s fastest-growing companies.

The buyout proposal of $82 per share announce Monday was orchestrated and submitted by Station CEO Frank Fertitta III and brother Lorenzo, president and vice chairman, in partnership with Colony Capital, a California-based private equity company that owns several casinos including the Las Vegas Hilton.

Stock in Station Casinos, which is trading at 52-week-high of nearly $85, has spiked nearly 70 percent in three months as the Fertittas and other major investors have been furiously buying up stock amid speculation that the company was being targeted for acquisition.

In Colony Capital, the Fertitta brothers have found a strong private equity partner. Colony Capital purchased Harveys Casino Resorts in 1998, and later sold it to Harrah’s Entertainment.

A buy-out from a private equity firm headed by Fertitta would mean that Station would cross over from public to private. But because they would take on more debt, Station’s pace of rapid expansion in recent years could slow significantly.

“If the buy-out is successful, it would create a very debt-laden company in comparison to where it is now,” said William Eadington, economics professor and director of the Institute for the Study of Gambling and Commercial Gaming at the University of Nevada, Reno. “It would become much more difficult for the company to expand at the rate it’s been expanding,” Eadington said.

With 14,400 employees or “team members” as they are referred to, not only is Station Casinos one of the largest companies in Southern Nevada, it’s also among the fastest growing.

Since the mid-1990s, Station Casinos has built several Southern Nevada casino resorts including Boulder, Texas and Sunset Stations, Green Valley Ranch and the lavish $925 million Red Rock Resort, which opened in early 2006. In addition, the corporation in recent years purchased Santa Fe Station, Fiesta Rancho and Fiesta Henderson. The company also plans several other Southern Nevada resorts on large parcels of land the Fertittas purchased before passage of a 1997 Nevada law restricting neighborhood casinos. Among them: Aliante Station in North Las Vegas, which, like Green Valley Ranch, is to be 50 percent owned by the Greenspun Corporation, and Durango Station, planned for the intersection of Interstate 215 and South Durango Drive. Two years ago, the company purchased the 26-acre Castaways site in Las Vegas for nearly $34 million.

The company has also proposed two properties in the Reno, but the buyout deal immediately raised questions among analysts about when or if those projects would proceed.

If the buy-out is approved, the private investment group would be required to purchase all the company stock not already owned by the Fertittas. Station has a market capitalization of $4.86 billion, so the company would be looking at a price tag of at least $4 billion.

“If they borrow $4 billion at eight percent, that’s $320 million in debt service alone” said Eadington, who explained the Fertittas might be pressured to delay or cancel plans to expand the brand in order to sell off some assets to reduce the company’s debt.

Still, local gaming sources familiar with the regulatory climate that encompasses public gaming corporations say a private acquisition of Station Casinos or Boyd may be good for the companies and for the local economy.

“There are some good arguments in favor of leveraged buyout or management buyouts,” said a local gaming official.

Among them, according to the local source: “elimination of the so-called ‘tyranny of quarterly earnings,’ where the stock market places so much emphasis on quarterly numbers rather than intermediate and long-term growth prospects.”

Another benefit of a casino crossover from public to private is that it would no longer have to pay increased costs to comply with landmark corporate governance and accounting reforms under the Sarbanes-Oxley Act, passed in 2002.

At least one local gaming source says “the lack of respect Wall Street has shown for its Red Rock Station project” probably contributed to the decision by the Fertittas to go for a leveraged buy out.

“That’s going to be a huge moneymaker for the company in the long term,” the source said.

Officials from the Culinary Union, which owns Station stock as part of its long-running battle to win representation of Station employees, said it will take some time to analyze the ramifications of the proposed buy-out.

“We’re not going to comment yet,” said Chris Bohner, research director for Culinary Local 226. “We’ve just begun to evaluate the deal.”

Meantime, the Las Vegas Review-Journal reported Tuesday that deal had already drawn a lawsuit from an investor contending that the buyout price was too low. A special committee of independent directors will decide whether to approve the buy-out.

It’s been two months since a private equity partnership proposed a leveraged buy-out of Harrah’s Entertainment, and the deal is still pending.

In early October, Harrah’s announced it had received a proposal from Texas Pacific Group and Apollo Management to acquire all the company’s outstanding common stock for $81 per share or roughly $15 billion.

Another Las Vegas-based gaming corporation that could become a takeover target is Boyd Gaming Corp. In the last three months the price of stock in the locals casino giant has surged nearly 30 percent.

Some Wall Street analysts have said Boyd could become an attractive target partly because the company – like Station Casinos – owns a great deal of land in Las Vegas. Boyd owns 63 acres on the Las Vegas Strip. Early next year, the company plans a land swap with Harrah’s that will net it another 24 acres.

Boyd officials are mum on the idea.

“We can’t respond to rumors or speculation,” said Rob Stillwell, vice president, corporate communications, Boyd Gaming Corporation.

Still, gaming and economic observers say that whatever happens to Las Vegas-based casino corporations, especially Station Casinos and Boyd Gaming – two companies that cater to locals – it would probably be in the best interest of the companies and the local economy if casino executives remain at the helm.

“They knew early on how to take care of customers,” said Anthony Curtis, president of Las Vegas Advisor.com. “They’ve been doing it now for three decades.”

Keith Schwer, director of the Center for Business and Economic Research at UNLV, said that unless the casino executives are partners in the takeover – as they are in the Station deal – there’s no guarantee local management would be part of any deal to buy a casino company.

Indeed, Schwer noted, for directors of private equity firms, breaking up is easy to do.

“A lot of them break up the corporations and sell the parts,” Schwer said. “These are finance guys, not gaming guys, and they make very poor casino operators.”