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Howard Stutz
 

Plan to buy Cannery Resorts falls apart

13 March 2009

LAS VEGAS, Nevada -- A $1.75 billion deal by Australia's Crown Ltd. to buy Las Vegas-based Cannery Casino Resorts collapsed Thursday when the buyer couldn't meet certain conditions in time to close the transaction.

The Australian company, which is controlled by billionaire James Packer, planned to buy the two Cannery casinos in North Las Vegas and on Boulder Highway, the Rampart Casino near Summerlin, and the Meadows Race Track and Casino near Pittsburgh. The deal had been pending since December 2007.

In a statement released by Crown, the company paid Cannery Resorts a termination fee of $50 million Thursday. However, Crown still wants to acquire Cannery but will go through a multilevel process to complete the transaction, which could take up to two years.

Initially, Crown will pay $370 million to acquire 24.5 percent of Cannery Resorts and up to 60 days to gain regulatory approval in Nevada and Pennsylvania. Cannery Resorts can agree to extend the time period to 90 days. If the deal falls apart again, Crown will pay an additional termination fee of $200 million.

If the purchase is completed, Crown has two years to buy the remaining interest in Cannery for $1.4 billion under the terms of the original agreement.

"Crown considers these new arrangements represent a satisfactory outcome for its shareholders," the company said in a statement. "Crown is looking forward to working cooperatively with the Cannery team to continue to grow the business including the launch of the new Meadows permanent casino in Pittsburgh which is due to open in April."

The demise of the Cannery purchase had been rumored for several months.

Plan to buy Cannery Resorts falls apart is republished from Online.CasinoCity.com.