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The Borg Assimilating Plams
» filed under Mergers & Acquisitions comments: 15
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We've been hearing about the Harrah's Buying Palms thing for almost a year, but now - with Harrah's changing its name to Caesars Entertainment and Maloof in a bit of a jamb - we see the Borg hardware firing up to assimilate.
With a name fitting of a Borg accomplice, Leonard Green & Partners - last seen pitching (and walking away from?) a bid to buy MGM's half of Borgata in Atlantic City - have partnered with Texas Pacific Group (part of the Caesars owner consortium) to buy majority ownership from Palms owner George Maloof.
The nuts and bolts of the deal are that Palms has been screwed by the recession, causing them to clamp down on loose expenditures like... uhm... paying all their bank loans. Feeling the vice tightening around his L bracket, George Maloof will relinquish majority control of the joist in exchange for Mr. Green & Loveman taking over a ballast of the revolving circular saw debt. Plams will then be assimilated into the Caesars borg and George Maloof will be left holding a percentage and a gift basket of big black caulk.
I think I nailed it, but if you wish to learn more about the Caesars Plambake, read this.
[Insert Pac Man dying noise]
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Comments & Discussion:
This property is in need of renovation - not Harrah's. Ugh.
Good, Maloof sucks.
NOOOOOOOO!
Wouldn't it be great if Harrahs competed for market share by actually offering a better product, instead of buying up the competition and dragging it down to Harrahs level?
Gotta say Penn National sucks too, if they had a shot at this and opted for M instead. Would've been a perfect move for the Tropicana team too.
Maloof opened his Palms in 2001.
Macker opened his Palms last night.
I seem to recall that Maloof only owns about 10% of the Palms. The remainder is owned by an odd assortment of investors and casino insiders (including the Fertittas). Even in Harrah's takes over, I would be surprised if Maloof doesn't continue to manage the property.
I'd expect Maloof's management to last like Robert Earl's involvement has once PHo was assimilated.
If I was George, I'd have just begged them to trade me Rio for the property and the Kings.
Talk about marginalizing the Plams more than it already is. CET might as well go buy Aliante Station or Red Rock. Any casino improvements they make would only cannibalize Rio. Make the same improvements at a Strip property and at least you could get some of MGM's business. Here's an idea for Gary Loveman: Put a little care into a few of the properties your company already has.
"Texas Pacific Group (part of the Caesars owner consortium)"
Don't you mean "collective"? Sorry, bad nerd joke.
Now I am not an economist or a fincial guru, but I though Caesar's already had a shit-ton of debt, how are they able to afford taking on more, with both PH and the Palms. Are they just hoping the economy turns around in time so all of their properties can then pay of said debt?
If Green does take over for MGM at Borgata how will the Green-Loveman connection work with Boyd in AC? Seems like some odd bedfellows?
Plambake...Ha!
I consider this good news for my former teammates at Palms. The resort had been losing players for years and current managment has overextended employee duties. With the union in place, that won't happen anymore.
Maloof gained control of N9NE Groups Palms assets a couple days ago through nefarioud means...are these included in Ceasars takeover?
Dont worry George, I'm sure there is a coffeeshop hostess that will keep you company...just be sure to wait until you get home before popping the ambians.
And I thought "Palms slots pay lots!" Was such a great marketing tool.
If this all goes down (and of course, we are in the speculation phase), Maloof could end up somewhere else with an ownership stake in exchange for running the place. Come summer, all of Cosmo's rooms will be open and the huge ad blitz they are running in major cities will have worn thin. The back-to-back grand opening and NYE hype will be long gone and they'll be just another high-end casino competing for guests.
If I were Cosmo (at that point), I'd give Maloof a huge incentive to come in and do what he did best at The Palms with the celeb relationships plus excellent marketing to locals.
Harmon is scheduled to be put through to Valley View and Valley View is scheduled to be completed straight through at that intersection. The problem is that the county does not have the money to do it. If I were Duetsche Bank, I'd sit down with Jim Murren and write the check to fund that intersection completion. Both CityCenter and Cosmo need to pad their places with local patronage, something current road access all but eliminates.
Have to agree with the above post..Cosmo and City Center are going to be in a long term battle, along with Wynn and Ceasers, to go after the "curious class" that each needs to survive..
Hate to see Harrahs get their hands on the Palms Video Poker Pay Tables..that's going to be a bad and an ugly scene..
Caesars Entertainment needs to get its' own house in order before buying up other properties. They're already carrying a multi-billion dollar debt load and had to cancel their recent IPO (which was going to help pay down some of that debt) due to "market conditions". When you're carrying nearly $20B in debt against nearly $30B in assets, you need to be getting your debt levels down and not adding anymore to it. The company has already flirted with bankruptcy in the last few years and if things go south this year due to increasing fuel costs causing fewer visitors to their properties nationwide, they really could end up in CH. 11 and potentially end up in the same situation Station Casinos found itself when they filed for bankruptcy in 2009.
Re: Station...
Is Loveman really evil enough to pull off the kind of under-handed shit the Station folks pulled in their bankruptcy?
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