CasinoCityTimes.com

Gurus
News
Newsletter
Search News Subscribe
Stay informed with the
NEW Casino City Times newsletter!
Newsletter Signup
Stay informed with the
NEW Casino City Times newsletter!

Gaming News

 

Aladdin Offer Likely in Next Two Months

4 October 2002

by Jeff Simpson

LAS VEGAS--Colony Capital LLC and Pinnacle Entertainment, two Southern California-based casino operators, are about a month or two from making a formal offer to buy the bankrupt Aladdin, an knowledgable inside source said Thursday.

Pinnacle and Colony are expected to offer about $500 million for the Aladdin along with a commitment to invest about $100 million more to renovate the property. The new buyers would turn to the Aladdin's bankers to borrow the money to buy the property. The bankers, now owed about $430 million secured by a mortgage on the property, would loan Colony and Pinnacle the money for a five-year term at reduced interest rates.

The inside source disputed published reports that claimed the two prospective bidders have already agreed to join with Marriott International to make a three-way bid for the 2-year-old Aladdin.

"There is still no decision on a flag for the property," said the source, who spoke on condition of anonymity.

The source also disputed reports that suggested Pinnacle would manage the casino while Colony would be an investor.

"This would be a complete joint venture, with both companies jointly investing and jointly hiring a management team," the insider said.

The sale probably wouldn't take place until next summer, at the earliest, the source said.

Colony and Pinnacle executives declined comment Thursday and KPMG Corporate Recovery Services partner Jeff Truitt did not return a Thursday phone message. The Aladdin hired Truitt and KPMG to sell the bankrupt property.

Aladdin lawyers are expected to file the property's sales plan within one week, a plan that would have to be reviewed by the property's creditors and approved by Bankruptcy Judge Clive Jones.

The Aladdin owes secured creditors $540.3 million, including about $70 million for slot loans and leased equipment, $85.2 million to unsecured creditors and $2.6 million in priority tax claims.

< Gaming News