International edition
June 23, 2021

An auction has been set for January 21, followed by a sale hearing on January 27

Icahn-led group to bid for Fontainebleau Las Vegas

(US).- Carl Icahn-led Icahn Nevada gaming acquisition has been selected as the stalking horse bidder on the upcoming auction of the us$ 2 billion Fontainebleau Las Vegas project. Scott Baena, the Bilzin Sumberg Baena Price & Axelrod attorney representing Fontainebleau Las Vegas, confirmed the selection Tuesday.

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evada Gaming’s bid consists of about us$ 51 million to cover several costs, including asset maintenance and a cash payment of us$ 105 million, Baena said.

Financier Carl Icahn has offered us$ 156.5 million to acquire the partially built Fontainebleau Las Vegas resort, which has been stalled in bankruptcy court since June, according to the resort's chief operating officer. At a bankruptcy court hearing today in Miami, Icahn bid us$ 105 million plus us$ 51.4 million of debtor-in-possession financing, said COO Howard Karawan.

The bidding war between Icahn’s group and Penn National Gaming, which had made a us$ 102 million offer to be the stalking horse bidder, was first reported Monday in The Miami Herald. Penn, which said last week it had offered us$ 50 million plus us$ 51.5 million of DIP financing for the Fontainebleau, dropped out after raising its bid to us$ 145 million, said Penn spokesman Joe Jaffoni.

Both bids are dwarfed by the us$ 2 billion that has already been spent on the 3,800-room casino resort, which sits toward the northern end of the Las Vegas Strip. An auction has been set for January 21, followed by a sale hearing on January 27, with a closing date of no later than February 9, according to court documents. Developer Jeffrey Soffer filed for Chapter 11 bankruptcy protection this summer.

Penn's decision to drop out of the initial bidding is in line with the company's previous expressions of reluctance to overspend in a market still reeling from the impact of the global economic recession. "While many scenarios could still play out, today's action underscores Penn's financial discipline," Barclays Capital said in a research note.

The Fontainebleau Las Vegas project was planned on 9.8 hectares at the sites of the former El Rancho Hotel and Algiers Hotel, on the north end of the Las Vegas strip. Plans included a 3,815-unit, 63-story glass skyscraper and a 9,290 sqm casino. The project has stalled and has yet to be completed.

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