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Reorganization Approved For Las Vegas Hilton Ownership18 November 2005
By Howard Stutz
NEVADA -- Nevada gaming regulators took less than 15 minutes Thursday to approve a corporate reorganization of the Las Vegas Hilton's ownership in which the property and five other Colony Capital casinos will be situated under the privately held Resorts International banner.
The move gives the Colony Capital casinos, located in four American gambling jurisdictions, a greater tool to cross market, said Nick Ribis, who oversees Resorts International.
"It gives us the ability operationally and financially to have great flexibility," said Ribis, a former attorney who made a mark on the gaming industry in the late 1980s and early 1990s when he oversaw Donald Trump's Atlantic City casino empire.
Ribis said following the Nevada Gaming Commission vote that Resorts International is the largest privately held gaming company. In June, Fortune magazine called Resorts the nation's fifth-largest gaming company, based on the properties it controlled.
He said the company would be headquartered in Las Vegas.
The commission's vote followed a preliminary blessing of the matter by the Gaming Control Board two weeks ago, which also approved for licensure real estate investor Tom Barrick, who oversees Colony Capital, a $6 billion private-equity fund.
Company officials told gaming regulators the reorganization would make it easier to raise equity capital for improvements and expansion projects. It would also improve Resorts International's ability to compete in buying power with Harrah's Entertainment and MGM Mirage, the world's largest gaming companies.
"We needed to do this to get organized properly," Ribis said. "In four years of building (Resorts) we've developed great efficiency on the corporate level and this allows us to execute a game plan for the entire company rather than on an individual property basis."
Ribis organized the initial public offering for Trump's casinos in 1995. He joined Colony Capital in 2000 and he and Barrick began a buying spree.
Colony bought the Resorts Casino, Atlantic City's first casino, for $140 million and followed up in 2004, spending $280 million for the Las Vegas Hilton.
The company's largest investment came this year. As Harrah's was buying out Caesars for $9 billion, the companies needed to divest casinos that could have federal antitrust implications.
For $1.2 billion, Colony Capital bought two casinos in Mississippi, a riverboat casino in Illinois and the Atlantic City Hilton. Since the transaction closed this year, two of the casinos, in Tunica, Miss., and East Chicago, Ill., have been given the Resorts name.
Ribis said the company will develop a frequent-players card that customers can use to redeem credits at other Resorts properties. He believes the card will help the Las Vegas Hilton.
"Everybody wants to come here and, with our access to the convention center, this is our flagship property," Ribis said.
Ribis said the Las Vegas Hilton will undergo a $75 million remodeling over the next few years; the initial $20 million first phase of the renovation will be completed next month which will enhance the hotel's main entrance and lobby.
Ribis hinted that the company will continue to grow.
"We'll evaluate other opportunities as they come along," Ribis said.
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