Monday, February 23, 2009

Boyd to Buy Station?

This afternoon Boyd Gaming announced it has made an unsolicited offer to purchase a significant portion of Station Casinos properties in the Vegas Valley. Here are some excerpts of the letter sent from the Boyd Executives to Frank Fertitta of Station Casinos...

"We believe that Boyd is uniquely qualified to operate the assets of Station. We are dedicated to operating first class casino entertainment facilities and have demonstrated this commitment within the Las Vegas market for over thirty years. "

"Based on available public information, we estimate that the enterprise value of the OpCo Assets is approximately $950 million."

"As of December 31, 2008, Boyd had approximately $2 billion in available liquidity under its Revolving Credit Facility. We have sufficient liquidity to finance a cash transaction consistent with the terms outlined in this Proposal."

The "OpCo" asset that Boyd is seeking includes Station's ownership interest in Green Valley Ranch and Aliante Station (Co-Owned with the Greenspun Family) as well as Texas Station, both Fiestas as well as Wild Wild West on Tropicana.

If they are able to pull it off, it would be committing highway robbery in my opinion. Less than a billion for those properties when Aliante went up 3 months ago for almost $700 million by itself? I can't imagine the deal going through as stated considering there are several other people out there fishing to get into the Vegas market, i.e. Ameristar, who coincidentially built the Fiesta Henderson back in the 90s as the african-themed "Reserve." Another person who might have some ability to pick up one or 2 of those places is Michael Gaughan, owner of South Point.

As a small side note to point out how far things have fallen in Vegas... Harrahs recently spent more than $950 million on the new tower at Caesars before deciding to not complete it but Boyd may get a whole collection of properties for the same price!


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