rothers Frank and Lorenzo Fertitta will form a new company along with their existing ownership partner Colony Capital, together with some of Station’s mortgage lenders to make the opening offer for nine casinos and five joint venture properties. The plan is similar to a related proposal the Fertittas made last month for the company’s Red Rock Casino and three other resorts.
The us$ 772 million bid would be the opening offer of a court- sanctioned auction which may attract rival bids. The proposal is part of a reorganization plan that must be voted on by creditors, who split into competing groups after the company filed for bankruptcy in July. That vote will be taken into consideration by U.S. Bankruptcy Judge Gregg Zive.
Before Station’s bankruptcy filing, creditors rejected another proposal that would have allowed the Fertittas and Tom Barrack’s Colony Capital to retain control. “This agreement is another important step toward maximizing the value of all of the Station Casinos properties,” Station Chairman and Chief Executive Officer Frank Fertitta III said in a statement.
Today’s plan is supported by holders of almost 90 % of the secured debt, Station said today. The company didn’t provide details on how much would be contributed by the Fertittas, Colony and creditors. At least us$ 1.7 billion of Station’s debt was the result of a leveraged buyout in November 2007 by Fertitta Colony Partners LLC, court records show.
Station spokeswoman Lori Nelson and Colony spokesman Owen Blicksilver declined to comment.
Station has 13 casinos plus five joint ventures located around suburban Las Vegas, catering primarily to people who live in the area, one of the hardest hit by the recession and housing market collapse. It also operates casinos for American Indian tribes.
Last month, Station filed a separate reorganization proposal to make an us$ 85.6 million investment that would allow the Fertittas and Colony to retain a stake in the Red Rock Casino Spa, Palace Station, Boulder Station and Sunset Station, four casinos which generate most of the company’s cash flow.
Colony has the option to take as much as almost 10 % of the four casinos under that plan, said a person familiar with the proposal, who declined to be identified because the details aren’t public.
Rival casino company Boyd Gaming Corp. said in February 2009 it was interested in Station’s casinos, and in December announced it was seeking to acquire all of Station’s assets. Boyd didn’t immediately respond to an e-mail request for comment today.
Penn National Gaming Inc. is looking at virtually all U.S. gaming assets that come up for sale, including Station’s casinos, “if the valuation made sense,” Chief Financial Officer William Clifford said in an interview last month. The case is In Re Station Casinos Inc., 09-52477, U.S. Bankruptcy Court, District of Nevada (Reno).