Under New Management
by Marian Green
Departments
Under New Management
Icahn sells gaming operations to Whitehall Funds
Carl Icahn’s American Entertainment Properties Corp. (AEPC) has entered into an agreement with Goldman Sachs-affiliated Whitehall Street Real Estate Funds to sell its gaming operations for $1.3 billion.
With this transaction, AEPC’s parent company, American Real Estate Partners, L.P. expects to gain $1 billion on its investments in AEPC. AEPC’s casino assets are comprised of the Stratosphere Casino Hotel & Tower, the Arizona Charlie’s Decatur, the Arizona Charlie’s Boulder, all in Las Vegas, and the Aquarius Casino Resort in Laughlin, Nev.
AEPC began investing in the casino business in 1998 when it invested in the Stratosphere Casino Hotel & Tower. In May 2004, it acquired Arizona Charlie’s Decatur and Arizona Charlie’s Boulder. Last May, the company acquired the Aquarius Casino Resort. AEPC’s gaming operations include 4,912 hotel rooms, 4,887 slots, 122 table games and 5,619 total gaming positions over an aggregate of 236,000 square feet of casino space. The purchase also includes 17 acres of undeveloped land surrounding the Stratosphere Casino Hotel & Tower.
“Our gaming investments are a successful example of our strategy of acquiring undervalued and out-of-favor assets, and improving operations and enhancing value,” said Icahn, chairman of the board of the general partner of AEPC. “The management team has done a great job turning this business around. We believe that this sale represents an opportunity for AEPC to take advantage of the current favorable market environment for gaming assets and to realize significant gains on our multiyear investment in the industry. Pro forma for this transaction AEPC will have in excess of $4 billion of liquidity to continue to invest in undervalued assets.”
The transaction, expected to close near the end of the year, is subject to Nevada state regulator approval as well as customary conditions.
