Icahn's Perfect Timing
Carl Icahn hit another good lick selling the Fontainebleau, Las Vegas for $600 million. Icahn bought the big blue tower for $148 million in February 2010. The canny Icahn sold The Plaza, in downtown Las Vegas, the furniture, bathroom fixtures and wall safes that were supposed to be used in the Fontainebleau. Icahn said in his press release, the property “was one of Icahn Enterprise's hidden gems carried at $143 million on our balance sheet and in our statement of indicative net asset value as of June 30, 2017. IEP acquired this asset when others were unwilling to invest, and the sale has resulted in a gain of approximately $457 million for our unit holders.”
Icahn didn’t put a lot of thought into the purchase back in 2010, “according to a former listing broker for the hotel, Icahn bought it sight unseen and didn’t know what he’d do with it,” writes Eli Segall of the Las Vegas Review Journal.
What a way to make $457 million.
Of course the new buyers, investment firms Witkoff and New Valley, figure they got a smoking deal. Segall reports that Steven Witkoff, called the never-finished project “significantly undervalued” and said the new ownership paid a “substantial discount” to the cost of building it from scratch.
The firm added that it has “identified numerous ways to unlock the significant underlying value of the property” but did not provide any details.
“2755 Las Vegas Blvd. South is one of the best physical assets in the country, which is one of the reasons we were attracted to it,” Steven Witkoff said in the statement.
The gambler who got the best of it was Icahn. His timing looks perfect again.