Las Vegas Sun

March 28, 2024

Executive: Icahn may look at takeovers

If Las Vegas casinos continue to struggle into 2002, financier Carl Icahn could emerge as a potential buyer, one of Icahn's top Las Vegas executives said Thursday.

Chuck Davison, director of marketing for Icahn's three Las Vegas hotel-casinos, likened the situation to that faced by former Mirage Resorts Inc. Chairman Steve Wynn two years ago. Struggles at several Mirage properties depressed its stock -- and left the door open for billionaire Kirk Kerkorian to launch a successful takeover of that company in 2000.

Las Vegas has shown signs of recovery following a steep drop-off in business, and the stocks of Las Vegas' largest gaming operators have rebounded strongly as a result. But if recovery stalls, stock prices become depressed and properties become distressed, Icahn will be ready, Davison said.

"There are two men in Las Vegas who can buy anything they want, any day they want -- Kirk Kerkorian and Carl Icahn," Davison said at a meeting of Working in Communications, a Las Vegas professional organization.

"Carl is looking for the right deal, and when it comes along, we'll take it."

If Icahn makes any takeover attempts, however, it's more likely to be for individual properties, rather than a corporation, Davison said. And he'll be looking for properties that fit the mold of his current properties -- the Stratosphere and the two Arizona Charlie's casinos.

"Carl is never going to buy a property like the Bellagio," Davison said.

Icahn entered the Las Vegas market in 1998, when he took over the Stratosphere in bankruptcy court. He later acquired bankrupt Arizona Charlie's and Sunrise Suites, which was remodeled and opened as Arizona Charlie's East.

But Icahn has examined far more opportunities than just those three -- Davison estimated Icahn has looked at as many as 50 casino properties within 100 miles of Las Vegas in the last three years, including the Regent Las Vegas (now JW Marriott Las Vegas).

Now, the opportunity for an Icahn takeover might be the $1.2 billion Aladdin hotel-casino, which fell into bankruptcy last September. The goal of the bankruptcy is a sale of the property, attorneys for the Aladdin have said.

Davison didn't want to comment directly on the possibility Icahn would emerge as a bidder, as has been speculated.

"That's for Mr. Icahn to decide," Davison said. "If a bankrupt property becomes available at a great price, we'll look at it."

Davison says business is good at the Stratosphere.

In concert with the completion of its $75 million expansion, the Stratosphere launched a big ad campaign in Southern California and Phoenix last July. The campaign helped push occupancy up to 97 percent in July, and 99 percent in August, Davison said.

After the attacks of Sept. 11, the Stratosphere's occupancy remained "20 points higher than the rest of the city," while room rates held steady, Davison said.

"That was because of all the advertising we were doing in those markets," Davison said. About 60 percent of the Stratosphere's business comes from Southern California, a drive-in market Las Vegas has relied heavily on to mount its recovery.

Occupancy is now averaging in the mid-80 percent range, Davison said.

Stratosphere officials remain committed to drawing more visitors to the north end of the Strip, and for that reason, the company will continue pursuing a controversial, huge roller coaster proposed for the property.

"We're very confident this ride will move forward," Davison said. "I'm sure you'll see something move forward in the next 45 days."

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