Tuesday, Oct. 8, 2002 | 11:10 a.m.
SUN STAFF AND WIRE REPORTS
Peppermill Casinos of Reno has won court approval to buy the State Line and Silver Smith hotel-casinos in Wendover for $55 million after a bidding war for the properties.
The deal was approved Monday by U.S. Bankruptcy Judge Gregg Zive, who called the price an excellent one. Wendover is on Interstate 80 at the Utah border and serves the big Salt Lake City market.
Peppermill, which owns Wendover's two other major hotel-casinos, previously offered $49.6 million for the properties, and the deal was approved by Zive.
But the Peppermill rescinded the offer last month, citing a "material breach" of the agreement by the debtors and an investigation by the Federal Trade Commission into the legality of the deal, which would have given the company control of 95 to 98 percent of the town's gambling market.
Court documents also said that because the State Line and Silver Smith operate at a loss, a fair price for them would be substantially less than the initial offer.
Going into Monday's hearing, Biloxi, Miss.-based Isle of Capri Casinos Inc. had agreed to buy the two hotel-casinos for $30 million.
At the hearing, Columbia Sussex Corp., upped that bid by $1 million. Columbia Sussex operates the Horizon Casino Resort Lake Tahoe and just purchased the vacant Maxim hotel-casino in Las Vegas.
A bidding war ensued, with the two companies moving ahead in increments of $1 million and $2 million.
When the price reached $41 million, Peppermill offered $42 million, $5 million of which would be nonrefundable should the deal fall through.
After more bidding, Peppermill finally sweetened the offer to $55 million, with $22 million up front and nonrefundable.
The Peppermill is no longer concerned with the FTC investigation because when the deal closes, it will operate only the Silver Smith, the smaller of the two casinos, said Ellen Whittemore, an attorney for Peppermill and Generation 2000.
Generation 2000, a partnership between Bill Ensign, David Ensign, Melissa Richardson and Bill Richardson Jr., will operate the State Line casino, Whittemore said.
Members of the Generation 2000 partnership operate the Pahrump Nugget Hotel & Gambling Hall and the Hacienda Hotel & Casino near Boulder City, Whittemore said.
The Hacienda -- formerly called the Gold Strike Inn before it burned down in 1998 -- is controlled by Mandalay Resort Group executives Michael Ensign, William Richardson and David Belding.
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