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Aladdin stakeholder seen as takeover target

Thursday, Sept. 27, 2001 | 11:14 a.m.

A Malaysian casino company has taken a 5 percent stake in London Clubs International, the minority shareholder of the Aladdin hotel-casino on the Las Vegas Strip.

The move by Resorts World "could presage the start of a takeover of London Clubs," the Financial Times newspaper reported. The Aladdin's difficulties and demands for cash have savaged LCI's stock, sending it down from a 52-week high of 159 pence to 8.75 pence Tuesday. But news of the potential takeover sent LCI stock up 57 percent to 13.75 pence Wednesday.

Though its shares are depressed, the Financial Times said potential buyers have been warded off by the company's 40 percent position in the Aladdin, a property now on the brink of bankruptcy. If the Aladdin files for Chapter 11, LCI said it will ask to be released from its obligations to provide cash infusions into the Aladdin.

"If London Clubs can get released from its obligations ... and walk away from Aladdin, then it will become a (takeover) target," a leisure analyst told the Financial Times.

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