SEARCH NEWS:

 

Icahn Offers to Buy the Stratosphere Stock That He Doesn't Already Own

In a letter sent to Stratosphere's board of directors, Icahn offered $44.35 per share for the 211,400 shares he does not own -- a 92 percent premium over Monday's closing price of $23 per share. If successful, Icahn would become the sole shareholder of Stratosphere, removing the company from the public market.

Icahn currently controls 1.82 million shares of Stratosphere stock, or 89.6 percent of the company. Icahn's proposal would give Stratosphere an equity value of $90 million.

"I believe that you will find a $90 million valuation of Stratosphere would be fair and equitable for all Stratosphere stockholders," Icahn wrote in the letter, which was included in a filing with the Securities and Exchange Commission.

Stratosphere's board has not yet decided whether to accept Icahn's offer.

The currently trading shares of Stratosphere were issued to the holders of $120.6 million in senior mortgage notes in October 1998, when the Stratosphere's bankruptcy reorganization plan was approved. Since Icahn controlled more than 85 percent of those notes at the time, the plan made him the controlling shareholder.

The $90 million valuation would be less than the current assets of the company, currently valued at $157.5 million. The company currently has about $8.5 million in long-term lease obligations and debt.

In the fiscal year ending Dec. 26, Stratosphere posted net income of $2.22 million, or $1.09 per share, on revenues of $123.2 million.

< Gaming News