LV gaming, real estate operator in settlement

Tuesday, Dec. 12, 2000 | 11:20 a.m.

Executives with a Canadian company with substantial retail and gaming interests in Las Vegas said they expect a rival to acquire a greater stake in the company after raising its takeover offer.

Officials with Revenue Properties Co. Ltd., Toronto, said they would not oppose a bid by Acktion Corp., a Toronto-based real estate and property management company, to increase its holdings in their company.

Company officials said the move will lead to Revenue Properties' departure from the Las Vegas gaming industry.

Acktion, which has been a vocal critic of Revenue Properties' Las Vegas gambling investments, offered a higher share price with its new bid, but sought fewer shares of Revenue Properties than in last month's hostile takeover bid.

Under Acktion's new proposal, the company would pay $2.60 per share, up from $2.50, for not less than 23 million shares -- about $59.8 million, Canadian, or $39.3 million in U.S. dollars. Last month's takeover bid was valued at about $68 million, Canadian.

Acktion also established an agreement with the company's other major shareholder, Mark M. Tanz, establishing equal representatation on the board of directors, continuity of current management and the disposition of noncore assets, including gaming holdings. Tanz will continue to hold 23 million shares in the company.

Under terms of the agreement, Revenue Properties eventually would sell its 50 percent ownership of PT Gaming LLC, a Las Vegas company that operates a chain of 21 video poker bars and a casino. However, it has agreed to hold onto its investment in Pan Pacific Retail Properties Inc., a San Diego-based retail management company that has six properties and a regional office in Las Vegas.

"We will, in due time, exit the gaming business," Revenue Properties Chief Executive Officer Paul Campbell said today. "It is our intention to work with the (Las Vegas) partners in a way that works for all of us to exit this business in a timely manner."

The local owners in the PT chain are Phil and Tom Boeckle. They and their general manager, Paul Hill, could not be reached for comment this morning.

Meanwhile, Campbell said his company's board of directors decided not to proceed with the sale of any of the company's shares of Pan Pacific. The company filed a registration statement with the U.S. Securities and Exchange Commission earlier this month that it planned to sell up to 3 million of its 10.8 million shares of Pan Pacific.

Campbell said the company plans to keep the registration current and that it would reduce its investment in Pan Pacific sometime in the future.

Revenue Properties had held a controlling interest in Pan Pacific, but Campbell said the company's interest is now at about 34 percent when it expanded with the acquisition of Western Properties Trust, Emeryville, Calif., earlier this year.

Pan Pacific operates the Sahara Pavilion North, Sahara Pavilion South, Cheyenne Commons, Rainbow Promenade, Green Valley Town and Country and the Winterwood Pavilion shopping centers in the Las Vegas area. When Pan Pacific acquired Western Properties Trust in a $440 million stock and debt deal that closed last month, it picked up an additional seven shopping centers in Northern Nevada.

Rai Sahi, chief executive officer of Acktion, said last month that he was unhappy that Revenue Properties got into the gaming industry in 1997.

"We invested in a real estate company, not a casino operator," Sahi told the Reuters news service when Acktion made its takeover bid.

Revenue Properties formed RPC Gaming Inc., a wholly owned subsidiary, and it was approved to operate by Nevada gaming regulators in 1997.

RPC invested in PT Gaming, which has 21 pubs in the Las Vegas area, and the PT Mining Co., a Henderson casino with 163 slot machines.

PT Gaming has four unrestricted properties with a total of 138 slot machines between them and 17 properties operating with restricted licenses, meaning they have 15 or fewer machines each.

A typical PT's Pub has about 4,000 to 6,000 square feet in a sports bar environment with a restaurant.