Source: Mirage enters talks to buy Caesars gambling empire

Tim Dahlberg

Wednesday, April 21, 1999 | 10:13 a.m.

LAS VEGAS -- Mirage Resorts Inc. is trying to expand its presence on the Las Vegas Strip by buying neighboring Caesars Palace and other Caesars properties.

Just months after opening the world's most expensive hotel-casino next door to Caesars Palace, Mirage Resorts has entered the bidding for the resort and Caesars properties in Atlantic City, N.J., and Lake Tahoe, according to person close to the negotiations.

Mirage joined the bidding for the resorts, which were put on the auction block earlier this month by Starwood Hotels and Resorts Worldwide Inc., after talks with Park Place Entertainment hit a snag over price, said the person, who demanded anonymity. A deal to sell the resorts could be finalized within a week.

Starwood chairman Barry S. Sternlicht is believed to be seeking more than $3 billion for the flagship Caesars Palace hotel-casino along with the Caesars resorts in Atlantic City, N.J., and Lake Tahoe, Nev., and the Desert Inn hotel-casino in Las Vegas.

Published reports earlier said that Park Place, which owns the Hilton, Bally's and Grand casino chains, had been the leading contender to acquire the Caesars properties.

Officials at Mirage, which opened the $1.6 billion Bellagio hotel-casino next to Caesars Palace in October, did not return phone calls seeking comment.

Starwood officials declined comment, while Park Place had said earlier it would not comment on bidding speculation.

Ever since acquiring the Caesars properties as part of Starwood's $14.6 billion purchase of ITT Corp. in 1998, Sternlicht has said he was not familiar with the gambling business and would probably sell the resorts eventually.

In addition to the Bellagio, Mirage operates the Mirage, Golden Nugget and Treasure Island casinos in Las Vegas.

In a development apparently related to the impending sale of the casino properties, Starwood on Wednesday announced the resignation of Richard D. Nanula, president and chief operating officer of the company.

Sternlicht said in a statement that Nanula, who oversaw the hotel and gambling group, would seek other opportunities.

"Richard and I have been friends for over 10 years," Sternlicht said. "We shared a strategic vision for the company and believe that it is well on its way to fulfillment. As our business has evolved and the integration transition has progressed, we came to the mutual decision that our interests were best served by pursuing our careers separately."

Sternlicht said there are no immediate plans to seek a replacement for Nanula.

Starwood has more than 700 hotels in 72 countries through its St. Regis, Westin, Sheraton, Four Points, and Caesars brands.