In business on the Boardwalk
In business on the Boardwalk
Pinnacle Entertainment moves into Atlantic City with Sands purchase
Billionaire financier and casino owner Carl Icahn has agreed to sell his Sands Hotel & Casino in Atlantic City to Las Vegas-based Pinnacle Entertainment for $270 million. Included in the mid-September deal was a 7.7-acre parcel of land adjacent to the property.
Pinnacle, which has been looking for an entry into the Atlantic City market, said it will close and demolish the property's beleaguered 600-room hotel and casino facility 70 days after the close of the transaction. The company is looking to build a significant resort-casino on the full 18-acre site with prime Boardwalk access. However, details and financial commitments to such a project have yet to be revealed.
"This major new resort will be a key component in our plan to build a national network of gaming properties," Pinnacle Chairman Dan Lee said in a statement. "It will also help extend our development pipeline and our company's growth through 2010 and beyond."
Pinnacle had made an unsuccessful run to acquire Aztar Corp., which operates the Tropicana hotel-casinos in Atlantic City and Las Vegas. Columbia Sussex ultimately won the all-out bidding war for control of Aztar.
Gaming analysts opined that Pinnacle would likely take its newest acquisition and invest heavily into the Atlantic City market.
"The company could develop a resort comparable to Borgata at a development cost of approximately $1.5 billion," Morgan Joseph gaming analyst Adam Steinberg said in a note to investors. "A redevelopment of this property is a better use of funds, generating higher returns than merely upgrading the current property."
Icahn, for his part, said the sale was ultimately in the best interest of the property.
"After spending many months reviewing various projects for this property, it became patently clear that a shutdown of the Sands was necessary and inevitable to make room for a great new casino," he said in a statement.
Sands employees will receive varying forms of severance pay as part of the deal. In addition to union severances and non-union severance payments for employees who stay through the property's 60-day closing period, Icahn said his company would fund an additional week's worth of severance for eligible employees for each year of service over two years. Pinnacle said it would pay full-time employees, who have been with Sands for at least six months, two weeks of severance. Pinnacle and Icahn are both aiding in finding employees new jobs within-or outside of-their respective companies as well.
-Andy Holtmann
Pinnacle Entertainment moves into Atlantic City with Sands purchase
Billionaire financier and casino owner Carl Icahn has agreed to sell his Sands Hotel & Casino in Atlantic City to Las Vegas-based Pinnacle Entertainment for $270 million. Included in the mid-September deal was a 7.7-acre parcel of land adjacent to the property.
Pinnacle, which has been looking for an entry into the Atlantic City market, said it will close and demolish the property's beleaguered 600-room hotel and casino facility 70 days after the close of the transaction. The company is looking to build a significant resort-casino on the full 18-acre site with prime Boardwalk access. However, details and financial commitments to such a project have yet to be revealed.
"This major new resort will be a key component in our plan to build a national network of gaming properties," Pinnacle Chairman Dan Lee said in a statement. "It will also help extend our development pipeline and our company's growth through 2010 and beyond."
Pinnacle had made an unsuccessful run to acquire Aztar Corp., which operates the Tropicana hotel-casinos in Atlantic City and Las Vegas. Columbia Sussex ultimately won the all-out bidding war for control of Aztar.
Gaming analysts opined that Pinnacle would likely take its newest acquisition and invest heavily into the Atlantic City market.
"The company could develop a resort comparable to Borgata at a development cost of approximately $1.5 billion," Morgan Joseph gaming analyst Adam Steinberg said in a note to investors. "A redevelopment of this property is a better use of funds, generating higher returns than merely upgrading the current property."
Icahn, for his part, said the sale was ultimately in the best interest of the property.
"After spending many months reviewing various projects for this property, it became patently clear that a shutdown of the Sands was necessary and inevitable to make room for a great new casino," he said in a statement.
Sands employees will receive varying forms of severance pay as part of the deal. In addition to union severances and non-union severance payments for employees who stay through the property's 60-day closing period, Icahn said his company would fund an additional week's worth of severance for eligible employees for each year of service over two years. Pinnacle said it would pay full-time employees, who have been with Sands for at least six months, two weeks of severance. Pinnacle and Icahn are both aiding in finding employees new jobs within-or outside of-their respective companies as well.
-Andy Holtmann
