Tuesday, June 15, 2004 | 11:10 a.m.
Colony Capital LLC could be a player in the MGM MIRAGE-Mandalay Resort Group merger if the consummation of the deal requires divestiture of local resort properties.
Thomas Barrack Jr., founder and chief executive of Colony, made a splash in the Las Vegas gaming market in December when he announced the company's intention to buy the Las Vegas Hilton.
On Tuesday, following a Nevada Gaming Control Board hearing that resulted in the unanimous approval of Colony's application to buy the Hilton, Barrack said his company would look at any divestiture opportunities.
"If there were a role for us to play in expediting that transaction, we would gladly participate," he said. "We are always voracious acquirers of great assets."
Barrack also said that the massive merger would likely spark additional interest in the gaming industry. Investors, he said, will likely key on the decision of respected gaming executives like Kirk Kerkorian and Terry Lanni of MGM MIRAGE to increase their stake in both the gaming industry and the Las Vegas market.
"I think it's a brilliant transaction," Barrack said. "The gaming business is becoming a real industry."
Regarding Colony's Hilton purchase, in making their presentation to the board on Monday, Barrack and fellow Colony executive Nicholas Ribis said that renovations of the hotel-casino would begin within two weeks of the expected Thursday closing of the $280 million transaction.
On Thursday, the Nevada Gaming Commission is expected to finalize the deal, which would become official at midnight.
The Las Vegas Hilton is being purchased from Caesars Entertainment Inc.
Barrack said the first phase of the renovations will include the investment of about $70 million over 24 months to remodel the hotel's 3,000 guest rooms and redesign the casino floor to increase foot traffic. That plan also would include the updating and remodeling of the hotel's 24-hour cafe as well as three other restaurants.
He also said that Colony will attempt to strengthen its ties to the nearby Las Vegas Convention Center and focus on positioning the property as the hotel of choice for conventioneers.
Within six months, Barrack said the company also will define its plans to renovate the rest of the property.
In the group's presentation, Ribis indicated that the property would maintain the Hilton name for the "foreseeable future." The current licensing deal for the name and ties to the Hilton reservation system run through 2008, Colony executives said.
Also at the meeting the board voted to extend for four months a limited license for Albert D. Seeno III, who is the beneficiary of an interest in Wendover Casinos Inc. and Peppermill Casinos Inc.
The license was extended to allow more time for negotiations into a complaint the board filed against him, his father, Albert Seeno Jr., and his brother David. That complaint alleges that, among other things, they associated with unsavory characters.
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