Red Rock Resorts Buys Palms for $312.5M

 hail2skins posted on Tuesday, 10th May 2016 - 3:51 pm

So lots of activity in the locals market lately.....Crown sells the Cannerys to Boyd, Station sells Aliante to Boyd, and now Station buys the Palms.

 vespajet posted on Tuesday, 10th May 2016 - 4:05 pm

Stations lost Aliante to creditors in the bankruptcy several years back. Interestingly enough, two of those creditors were TPG Capital and Apollo Global Management.

Red Rock Resorts got a decent deal on The Palms when you consider that Boyd is paying $380 million for Aliante. The property does fit into the more upscale market the company shifted to with properties like Green Valley Ranch and Red Rock Resort.

 hail2skins posted on Tuesday, 10th May 2016 - 5:49 pm

Are the Fertittas still in charge of RRS? Reports also that the brothers are interested in selling UFC for several billion.

 anawas posted on Tuesday, 10th May 2016 - 8:04 pm

Anyone have thoughts on the purchase price? It's about 18 percent of what Cosmo went for in 2014, though I know that's comparing apples to oranges

 vespajet posted on Wednesday, 11th May 2016 - 2:36 am

The Fertittas are the still running things at Red Rock Resorts. As for the UFC rumors, Dana White is denying the rumors.

 Chuckmonster posted on Wednesday, 11th May 2016 - 10:47 am

@anawas the price seems a little low to me.

 Ricogreen posted on Wednesday, 11th May 2016 - 11:57 am

I really hope Red Rock Resorts will be able to turn around that property, I was last year for dinner at Nine and was shocked how dead it was for a Friday night. When gambling is going bad for me I still love heading over there to catch at movie and some Red Vines at the Brenden Theatres.

 Dorian posted on Wednesday, 11th May 2016 - 12:01 pm

The Fantasy Tower alone cost 600 million. This is a shockingly low bargain basement price.

 VegasFanboy posted on Wednesday, 11th May 2016 - 1:34 pm

The price is interesting. An 8.8 multiple on EBITDA actually seems to hit the low end of a large, established business like the Palms. It may seem like a considerable deal over the Aliante, but Boyd is expecting about $40M in EBITDA in a few years, which puts Aliante's valuation at about a 9.5 multiple. Similarly, RR is confident that the Palms will return about $34M in earnings the first year after the acquisition. This may help provide a good starting point when trying to value other potential casino mergers. About a 9 - 11 multiple seems to be the standard right now.

 KickedBoar591 posted on Thursday, 12th May 2016 - 6:03 pm

I kind of like the Palms. But I agree with @Ricogreen, the place is rather dead. Even for a busy weekend like March Madness, they didn't have a lot going on. My choice is to always lower drink prices, but nobody ever listens to me.

 vespajet posted on Friday, 13th May 2016 - 11:50 am

The Palms is still trying to get by on it's former popularity, but that generation has since moved on to other resorts in Las Vegas. A lot of the swagger the Palms had back in the day was because of the Maloof brothers and how they were presenting the place to the world.

 KickedBoar591 posted on Friday, 13th May 2016 - 9:41 pm

@vespajet And now the world has moved on. Literally as The Real World is currently airing it's latest season from the Gold Spike!