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Bloomberg: Palms Is For Sale

By Chuckmonster on Friday, 4th March 2016 10:19am
  » filed under Mergers & Acquisitions  comments: 9

   

Bloomberg Business is reporting that The Palms has contracted with Macquarie Group to "explore a possible sale" with a sale target price at "several hundred million dollars", whatever that means.

Current owners, Texas Pacific Group and Leonard Green, took control of the property from Palms creator George Maloof nearly five years ago in June of 2011. Maloof agreed to give up control of the property in exchange for TPG/LG to eat $400m of debt accrued during the Palms Place expansion and other recession-era difficulties. At the time of the 2011 ownership, we penciled Palms' value just north of ~$600m.

Maloof said at the time:

We are excited to partner with Leonard Green and TPG, both leading private investment firms that will help the Company identify and execute on growth opportunities in our existing market of Las Vegas and beyond. While the last three years have been challenging for all Las Vegas operators, the Palms has been performing well and, with a stronger balance sheet, will be well positioned to undertake the initiatives that will continue to make it one of the foremost destinations in Las Vegas.

None of that happened.

Since being acquired by TPG/Leonard Green, Palms has engaged in extensive rejuvenation of their resort - hiring a number of high profile casino bosses (including former Steve Wynn protege Dan Lee for two months), rebranding hotel towers, renovating hotel rooms, adding new dining options, new public areas and engaging in next wave daylife/nightlife marketing by transitioning from gossip page celebrity hosts with to appearances by digital life social media personalities. None of these changes have managed to return Palms to the incredible heights it achieved as the center of the Las Vegas universe in the mid '00's.

Anybody talked to George Maloof lately?



Tagged: palms   for sale   george maloof   texas pacific group   leonard green   dan lee   





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Comments & Discussion:

You misspelled "Mirage"

It would be very cool if George Maloof could regain control of the Palms again. The Maloofs did make a great deal of money when they sold the Sacramento Kings of the NBA a couple of years ago.

#BringBackMaloof

Does anyone happen to know if the sale also includes Palms Place – the large condo tower that led to George Maloof going under? If it does, and the property could be had for $500-700 million, perhaps it would be a good buy for George and some other entrepreneur(s). Wonder if Derek Stevens would be interested in partnering up with some other entrepreneurs to run the Palms.

The last time I was at the Palms was in 2013. The casino and public spaces appeared to be well maintained. The casino wasn't empty but it wasn't filled to the max either. It also seemed to have a nice set of restaurants spread across all price ranges. From fast food in the food court, to a decent and reasonably priced buffet, and a coffee shop with some nice specials. I've also heard they have a nice steak house.

With all the MGM PGP hoopla, which will surely eventually be followed to the T by the suits at Caesars, perhaps this property could reap the customers who are sick of all that bull shit. Offer free parking (or free parking with food/beverage and/or casino play), reasonably priced restaurants and decent odds on games and it might be a good business strategy. The new operator could also target the locals market as well.

Wonder if Boyd would have any interest since the Gold Coast is across the street? Station Casinos?

Out of curiosity, and don't worry if it's too long winded, but how did you arrive at the 2011 valuation of $600M?

@VF In 2011, Maloof sold holdings ~66% of the total company for a debt extinguish of ~$400m.

Sweet. I get to be the first person to suggest Boyd Gaming purchases the property and rebrands it as the new Stardust!

All right, all right; dare to dream.

But I'm a rather loyal Boyd player and it would be nice for them to find a way to add this property, too, so I don't have to sneak off to the Gold Coast as much when I stay here.

The main problem with the Palms is the location. I have been in there a few times and it's a nice but small place. The Pearl is a great venue and the dining options aren't bad,

This was my go-to place in the early 2000s. Then for some reason the party went elsewhere.

Maybe the Maloofs can buy it back and restore it to its former glory...



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