oyd sent a letter it called a “non-binding preliminary indication of interest” to Station’s directors to acquire all of the company’s assets that do not serve as collateral for secured loans for about us$ 950 million, Boyd said in a statement. Boyd may offer to buy the rest of Station after a “due diligence review,” it said.
Station, which was taken private by management and private- equity firm Colony Capital LLC in 2007, struggled to pay creditors in a market among the hardest hit by deteriorating home prices and recession-driven job losses. Gambling revenue in Las Vegas last year declined the most on record.
“This value would present a superior recovery to the unsecured creditors of Station versus the current exchange offer” Station made earlier this month, Boyd said today. Station on February 3 offered investors 10 cents to 50 cents on the dollar in secured notes and cash, in exchange for about us$ 2.3 billion of existing bonds.
Boyd, which hired UBS AG as its adviser, said it had about us$ 2 billion available on its revolving credit facility. The us$ 950 million offered is an estimated “enterprise value” of the assets, it said.
“We intend to continue to work with our lenders and bondholders to pursue our previously proposed plan of reorganization, but we will evaluate the terms of Boyd Gaming’s proposal,” Station spokeswoman Lori Nelson said in an e-mail.
Both Station and Boyd are headquartered in Las Vegas and operate casinos that market themselves to local gamblers. Some of Boyd’s 16 casinos are located in New Jersey, Mississippi, Illinois, Indiana, and Louisiana, while all of Station’s 18 gambling facilities are in the Las Vegas area.
Station Casinos on February 3 proposed filing for bankruptcy in collaboration with lenders, in a restructuring to be voted on by March 2. Some secured lenders have agreed to support the plan, the company said. The buyout offer and bankruptcy proposal came 15 months after Station’s takeover by the Fertitta family and Colony Capital. The company’s casinos include Red Rock Casino and the 3-month-old Aliante Station.
As part of the proposal, affiliates of the Fertitta family and billionaire Tom Barrack’s Colony Capital have agreed to invest as much as us$ 244 million to maintain their current ownership stakes. The family and Colony paid us$ 90 a share, or us$ 5.4 billion, and assumed about us$ 3.3 billion in debt to acquire Station.
In December, Station abandoned a debt-exchange offer for some senior notes after trying to prod investors to accept a below-face-value cash payment or new, discounted notes with longer maturities. In August, Boyd stopped construction of its us$ 4.75 billion Echelon resort development on the Las Vegas Strip.
Station, founded by Frank Fertitta Jr., started as a Las Vegas bingo hall in 1976 and grew into a casino company focused on attracting gamblers who live and work in Nevada’s Clark County, where the population more than doubled between 1990 and 2006.