Polish Maverick's Place Peddled Again
If I was wondering if the clock was ticking, the front page of today’s Las Vegas Review Journal confirmed it is. “Owners of PT’s Pubs to buy the Stratosphere, 3 other Nevada casinos.” The owner of 56 bars--Golden Entertainment--is buying the often peddled “Strat” plus two Arizona Charlie’s properties in Las Vegas and the Aquarius in Laughlin for $850 million.
Eighth-grade graduate Bob Stupak had built the Stratosphere from nothing and $550 million from someone who couldn’t have been paying attention and opened in April 1996, at the time, the 3rd most expensive hotel-casino project in Las Vegas history. The self-proclaimed Polish Maverick was bankrupt three months later.
Richard N. Velotta reports, “Golden has received financing totaling $1.1 billion from JPMorgan Chase Bank, Credit Suisse, Macquarie Capital and Morgan Stanley & Co. to fund the cash consideration as well as to refinance Golden’s existing credit facilities.”
Once upon a time, Carl Icahn purchased these properties for $300 million, give or take, and sold them in 2007 for $1.3 billion. "Our gaming investments are a successful example of our strategy of acquiring undervalued and out of favor assets, and improving operations and enhancing value," Icahn said in a statement.
Golden head man Blake Sartini isn’t concerned about buying assets cheap. In a 15-minute conference call Monday afternoon, Mr. Sartini crowed the acquisition is “a perfect fit” for Golden, which serves a millennial crowd at its taverns and now will have a collection of thrill rides atop the Stratosphere.
“Sartini also said he is enthusiastic about growth prospects at the Stratosphere, which has 15 developable acres on the periphery of the property,” Velotta.
Some property that is.
What comes to mind is the Herbst Family of gas station, car wash, and convenience store fame buying three casinos in Primm on I-15 at the California border from MGM Mirage in 2007 for $394 million: Buffalo Bill's, Primm Valley and Whiskey Pete's. They also bought the Terrible's hotel-casino in Las Vegas at Paradise and Flamingo roads, two casinos in Pahrump, one in Searchlight and the Terrible's Town casino in Henderson. They’re Northern Nevada casinos were in Reno, Sparks, Verdi and Dayton.
Then in 2009, the company filed for Chapter 11, took the slot route operation and let the lenders have the casinos. Steve Green wrote for the Las Vegas Sun, “On March 10, Herbst announced the restructuring agreement that would reduce debt by converting more than $848 million in bank debt into new debt and equity and cancel more than $330 million in bond obligations. Under the plan, the Herbst lenders will take control of 15 casinos in Nevada, Iowa and Missouri; but the Herbst family will maintain a 90 percent ownership stake in Herbst Gaming's slot route business that includes 6,800 slot and other gaming machines at locations such as gas stations, bars and grocery stores throughout Nevada.”
Tick, tick, tick