SanchoPanza
SanchoPanza
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May 23rd, 2012 at 6:43:07 AM permalink
Posted: Saturday, May 19, 2012 9:30 pm | Updated: 11:49 pm, Sat May 19, 2012.

Bob Griffin, chief executive officer of parent company Trump Entertainment Resorts Inc., says the latest asset to go on the market is Trump Plaza Hotel and Casino. Griffin noted that Trump has been in discussions with potential buyers, but he did not identify them or reveal the Plaza’s sale price. . . .

Griffin made his remarks during a presentation Thursday at the East Coast Gaming Congress, an annual Atlantic City conference attended by top casino executives. His presentation also outlined the company’s cost-cutting strategy, including plans this year for a debt refinancing. . . .

Steve Norton, a private casino consultant and former senior executive at Resorts Casino Hotel, maintained that the “de-Trumping” of Atlantic City is really no big deal. He said the Trump casino name has been diminished by its three bouts with bankruptcy since the 1990s. “I don’t think it makes any difference to Atlantic City,” Norton said. “I feel it is more of a negative in Atlantic City than a positive. I just don’t think it brings anything to the table. They’ve been bankrupt three times.”

Norton said he was part of an investment group that tried to buy Trump Plaza but couldn’t raise the financing. Although Norton played down the importance of the Trump name, a bankruptcy judge thought differently in 2010. At that time, the Lasry-led bondholders backed by Donald Trump fought it out with billionaire takeover specialist Carl Icahn for control of the casinos. U.S. Bankruptcy Judge Judith H. Wizmur ruled the Trump brand was worth millions to the casinos and helped “tilt the balance” in favor of the bondholders over Icahn.

Icahn, though, remains in the picture. Griffin noted that Icahn, an investor, holds the debt on the Trump casinos, essentially serving as Trump Entertainment’s banker. . . . Griffin characterized the debt’s current 12 percent interest rate as “a little too rich.”

Trump Plaza’s sale would give the company some much-needed cash. Trump Entertainment would prefer to sell the struggling property instead of sinking millions into it to make it more competitive with its rivals. The Plaza incurred a $1.5 million operating loss in the first quarter this year and has seen its gambling revenue plunge 24 percent so far in 2012, New Jersey Division of Gaming Enforcement figures show. acpress
Tiltpoul
Tiltpoul
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May 23rd, 2012 at 9:55:48 AM permalink
What is Pinnacle's financial situation looking like? I thought they were trying to get into the AC market at one point in time. This would be a cheap(er) entry in a near-prime location. Unfortunately, they would have to sink a ton of money into renovations to put it in line with their brand image.

Not to derail the thread, but I could see Pinnacle making a bid for Argosy KC as well. KC is saturated (much like AC) but Pinnacle does know how to put a decent property together, especially if it's set up as a resort.
"One out of every four people are [morons]"- Kyle, South Park
cpm57
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May 23rd, 2012 at 12:25:16 PM permalink
Pinnacle still owns the Boardwalk lot that the Sands stood on. I don't think they will be doing anything in AC beyond selling their lot someday. They sunk money into buying and blowing up the Sands and then the economy crapped out. Pretty sure they are done as AC players.

Trump Plaza is an absolute dump. Its amazing what Landry's did with Trump Marina...the new Golden Nugget looks like a brand new place. Its going to take that same level of commitment to save Trump Plaza. The whole place needs to be redone. I expect it to sell for quite a bit under $100 million...it probably will take $50 million to redo the place and make it remotely attractive to visitors again....
hook3670
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May 23rd, 2012 at 12:42:42 PM permalink
I agree the place need a lot of work, however that is still a cheap price for one of the 12 casinos in Atlantic City.
cpm57
cpm57
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May 23rd, 2012 at 1:15:57 PM permalink
Trump Marina sold for $38 million. Resorts went for $35 million.

Plaza should fetch a little bit more than that due to its location value alone. But with the amount of money required to fix the place up so that there is any chance of turning a profit someday, the value of Trump Plaza will be depressed as well. The current Trump Entertainment company is highly motivated to unload the Plaza property...they don't have the balance sheet to invest the money to fix the place up. They are going to move it, and move it for cheap.

$50-60 million is my guess for the final purchase price. AC Casino properties that are severe fixer uppers can be had on the cheap now. Its a money losing property at this point. Its more valuable for Trump Entertainment to sell the thing and be rid of it than to hold on to it and continue to lose money knowing it can't invest in the property to turn its fortunes around.

Any buyer is going to need to spend $50+ million to fix up and rebrand Trump Plaza after they buy. Landry's had that and did that (on their own dime, they don't owe a cent on the property), and the Golden Nugget is poised for a rebound. Trump Plaza will be sold soon, it will be interesting to see to who, for what, and what their plan is.
cpm57
cpm57
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May 23rd, 2012 at 1:16:42 PM permalink
ACH will be next after Trump Plaza...although they will be more likely to shutter I think....
hook3670
hook3670
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May 23rd, 2012 at 1:32:05 PM permalink
ACH might get sold for a ridiculously low price like $10 million!
Tiltpoul
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May 23rd, 2012 at 1:45:51 PM permalink
Quote: hook3670

ACH might get sold for a ridiculously low price like $10 million!



I agree with cpm that ACH (sorry, the ATLANTIC CLUB) is more likely to close than be sold. If NJ regulators allow the place to stay open without requiring the hotel to stay open, it MIGHT stand a shot. Unfortunately, to market yourself as a locals casino with 500+ rooms is a difficult sell. GVR and Red Rock may be "locals" places in Vegas, but they appeal to a broader clientele. All the other locals places can't support nearly as many rooms.

Furthermore, the rooms run $200 for weekend rates during peak times. That might be okay, but the locals angle just won't stand for it. It might be a cheaper option for tourists, but then it's kind of like the Sahara or Riviera on the Strip; out of the way in an aging property. There's no niche for ACH, and that could kill them.

Back to the Plaza. Outside of Pinnacle, there doesn't seem to be a major casino group that would have any interest in a property in Atlantic City (that could afford it). While the Golden Nugget is a huge turnaround for the Marina, I still question how much pull that property can have. Landry's seems committed to the place, but that could just be a ruse for investors. Boyd's happy with its share of Borgata, and at one time, Caesars may have entertained a bid... not any more I'm sure. That leaves Icahn and some random casino investors, most of whom see AC as a dying breed.

Maybe Foxwoods will sweep in and screw.. I mean scoop up the place!
"One out of every four people are [morons]"- Kyle, South Park
hook3670
hook3670
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May 23rd, 2012 at 2:11:56 PM permalink
Seminole Hard Rock, at one time, was asking for permits to build one of the two "boutique" hotels under the new NJ law. It was to be upper AC by the Knife and Fork. Now I heard they possibly might want to just buy an existing casino for the right price.
NokTang
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May 25th, 2012 at 6:49:02 PM permalink
Quote: cpm57

T The current Trump Entertainment company is highly motivated to unload the Plaza property...they don't have the balance sheet to invest the money to fix the place up. They are going to move it, and move it for cheap.



Mr. Donald Trump himself was on Bloomberg a few weeks ago saying "I can borrow from any bank on the street but I don't need any money" while explaining the nations problems.
s2dbaker
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May 25th, 2012 at 8:15:29 PM permalink
Quote: NokTang

Mr. Donald Trump himself was on Bloomberg a few weeks ago saying "I can borrow from any bank on the street but I don't need any money" while explaining the nations problems.

He's also still looking for Obama's birth certificate. The guy is a joke. Trump can't be taken seriously.
Someday, joor goin' to see the name of Googie Gomez in lights and joor goin' to say to joorself, "Was that her?" and then joor goin' to answer to joorself, "That was her!" But you know somethin' mister? I was always her yuss nobody knows it! - Googie Gomez
pacomartin
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May 25th, 2012 at 8:44:44 PM permalink
Quote: SanchoPanza

Posted: Saturday, May 19, 2012 9:30 pm | Updated: 11:49 pm, Sat May 19, 2012.

Bob Griffin, chief executive officer of parent company Trump Entertainment Resorts Inc., says the latest asset to go on the market is Trump Plaza Hotel and Casino. Griffin noted that Trump has been in discussions with potential buyers, but he did not identify them or reveal the Plaza’s sale price. . . .



Griffin has made it pretty clear that he was willing to dump this property all along. I don't think Icahn wants this property. Back when he was trying to take over the corporation, Icahn made it pretty clear that he was only interested in the Taj Majal.

I don't see how this can continue with all these properties staying open.
NokTang
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May 25th, 2012 at 8:49:19 PM permalink
Quote: pacomartin

Griffin has made it pretty clear that he was willing to dump this property all along. I don't think Icahn wants this property. Back when he was trying to take over the corporation, Icahn made it pretty clear that he was only interested in the Taj Majal.

I don't see how this can continue with all these properties staying open.



What is "this" you refer to? Thanks.
pacomartin
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May 25th, 2012 at 9:24:29 PM permalink
Quote: NokTang

What is "this" you refer to? Thanks.



"This" incredible month over month drop in revenue in Atlantic city. The decay began well before the recession, when the first racinos opened in Philadelphia. Philadelphia Park opened in December 2006, and Harrah's Chester Downs opened in January 2007.

In comparison Las Vegas gaming revenue dropped 21% over a 24 month period from $6.95 billion down to $5.49 billion. The following 29 month period had an anemic recovery to $6.15 billion.

But AC is still not showing any signs of even leveling off. April 2012 revenue is down 41% from April 2006.

How can all those casinos remain open?
SanchoPanza
SanchoPanza
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May 26th, 2012 at 7:35:52 AM permalink
Quote: NokTang

Mr. Donald Trump himself was on Bloomberg a few weeks ago saying "I can borrow from any bank on the street but I don't need any money" while explaining the nations problems.


Trump has not had very much to do with the Atlantic City casinos for quite a few years. After his third bankruptcy, Credit Suisse began easing him out to the point where, IIRC, he was given a 10 percent share and some stipend in exchange for the use of his name.
Jojo
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June 4th, 2012 at 1:35:58 AM permalink
Lawrence O'Donnell socks it to Stinky:

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