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Coast Casino Puts Stock Offering on Hold

LAS VEGAS -- Coast Casinos Chairman Michael Gaughan said Wednesday that he's delaying his previously announced plan to sell shares in his company through a public offering.

Recent stock market declines prompted Gaughan's bankers to advise him to wait for better market conditions, he said.

Coast operates The Orleans, Gold Coast and Suncoast locals casinos and the Barbary Coast on the Strip, and plans to build a locals casino in south Las Vegas.

"It's 50-50 right now whether we'll do it," said Gaughan, whose company had been lined up to offer its initial public offering in September. "Here's what I have going for me. I don't have to do an IPO, I have plenty of money, so we can wait."

Gaughan said the real reason he wants to offer public shares is to maximize the company's value in order to allow about 70 minority partners to divest some of their holdings.

An IPO in the right market would reward current Coast investors with a share valuation about 50 percent to 100 percent higher, the chairman explained.

"A stock offering raises the value of your company," he said. "What I'm trying to do is take the company one notch higher."

Gaughan said his IPO plan was poorly timed.

"I should have come out in July when I originally wanted to," he said. "Now, it just depends where the market is."

The Coast boss said he'll also watch the reception to Steve Wynn's planned IPO. A planned Wynn Resorts offering to partially fund his $1.63 billion Le Reve megaresort and a Macau casino development is soon expected to be approved by the Securities and Exchange Commission.

Gaughan said Station Casinos' recently announced plan to build a first-class locals casino in Summerlin, close to Gaughan's Suncoast, had no impact on his decision to place his IPO on hold.

"It looks like they got a good site," he said of Station's option to buy a $65 million, 73-acre site in the Howard Hughes Corp.'s Summerlin Centre development, near the interchange of Charleston Boulevard and the Las Vegas Beltway.

But Gaughan said he wasn't disappointed Station chose a site so close to the Suncoast for its next locals casino complex.

"I think they'd be better off developing their other sites, but we go head-to-head all the time," Gaughan said. "I'm not worried about it at all."

By the time the new Station property is scheduled to open in mid-2005, the Suncoast should have finished its planned $65 million expansion, including 700 additional slot machines, a 1,600-car parking garage, four new restaurants, a sports bar and a new sports book.

"The Suncoast has already paid for itself," Gaughan said. "You know, it's not always 'How many?' Sometimes it's 'How good?' "

Gaughan said the IPO decision will have no effect on his company's plans to develop a new locals casino on the scale of the Suncoast in south Las Vegas, on a 55-acre site on Las Vegas Boulevard six miles south of Tropicana Avenue.

The site is adjacent to Interstate 15 and near the Silverado Ranch master-planned community. Coast plans to begin construction of the unnamed property by the end of next year.

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