Park Place interested in bankrupt property

Thursday, Oct. 4, 2001 | 9:03 a.m.

Park Place Entertainment Corp. is interested in examining opportunities to take an ownership position in the bankrupt Aladdin hotel-casino, but has not committed to making a run at the $1.2 billion property, Park Place Chief Executive Tom Gallagher said Wednesday.

Park Place has held a one-third position in the Aladdin's junk bonds since 1999. In a restructuring, Park Place could gain an ownership stake in the property if these bonds were converted to equity -- a strategy used by financier Carl Icahn several years ago to take control of the Stratosphere. The Aladdin is located just south of Paris Las Vegas, a Park Place-owned property.

But it's still too early to tell what direction the Aladdin's Chapter 11 bankruptcy will take, Gallagher said.

"In this environment, their options appear very limited," Gallagher said.

And it should not be presumed that Park Place will try to take over the Aladdin because of its position in the bonds, Gallagher said.

"We have so many good uses for our capital that it would have to be a very, very good opportunity to justify our getting involved in the Aladdin," Gallagher said. "We're in an ideal position because of who we are and where we are, but that doesn't necessarily mean we'll end up doing something."

In a separate presentation, Park Place Chief Financial Officer Scott LaPorta told investors the company will look for a return on investment of at least 18 percent before proceeding with acquisitions.