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Friday, July 30, 2010 | 3:32 p.m.
Sun archives
- Station Casinos, bondholders settle dispute (7-28-2010)
- Station Casinos bondholders renew interest in suing over deal (7-9-2010)
- New objections filed in Station Casinos bankruptcy case (7-2-2010)
- Station Casinos, Herbst Gaming fight bondholders in bankruptcy cases (6-17-2010)
- Station Casinos bondholders seek delay in auction process (6-9-2010)
- Judge OKs Station Casinos’ plan to sell 11 casinos (5-28-2010)
- Judge deals blow to Culinary Union effort in Station Casinos bankruptcy case (5-27-2010)
- New objections filed to Station Casinos bankruptcy plan (5-25-2010)
- Station Casinos loses $53.5 million in first quarter (5-17-2010)
Boyd Gaming has abandoned efforts to acquire Station Casinos assets that will be auctioned next week.
In a release issued today, Boyd Gaming President and CEO Keith Smith said it would be pointless for his company to pursue any of the 11 Station properties because Station insiders would have an advantage in the bid process.
“Over the last 18 months, we have devoted significant resources in our attempt to acquire the OpCo assets of Station Casinos,” Smith said. “Unfortunately, given bidding procedures that favor Station insiders and our current view of the limited potential value of the operating and development assets, we have concluded this opportunity no longer makes sense for our company.”
The OpCo assets include the Santa Fe and Texas Station properties and two Fiesta-branded casinos.
In a settlement agreement disclosed in a U.S. Bankruptcy Court filing earlier this week, Station indicated it had come to terms with bondholders owed $2.8 billion who have been fighting Station’s reorganization plans.
Under terms of the agreement, bondholders agreed to invest up to $100 million for a stake of up to 15 percent in a company that will control five Station “PropCo” properties.
The PropCo properties are Red Rock Resort, Boulder Station, Sunset Station, Palace Station and the Wild Wild West.
Those properties would be managed by Fertitta Gaming LLC and would be owned by Fertitta Gaming, Station co-owner Colony Capital LLC, the bondholder investors and banks holding the mortgage debt against the properties.
The new Fertitta-led company would be a stalking-horse bidder for the OpCo properties.
Boyd Gaming’s Smith said provisions in the bidding process make it difficult for qualified bidders to complete on a level playing field.
Smith said the process includes:
* A put option that would force an outside buyer to acquire the currently leased land under Texas Station for $75 million, a requirement that would not apply to Station insiders.
* Provisions which allow Station to transfer certain crucial assets from the OpCo assets prior to their sale, including customer lists and IT infrastructure, without adequate compensation.
* Station’s right to hire away any or all employees and executives of the OpCo assets prior to their sale, regardless of their strategic role, at Station's sole discretion.
“Boyd Gaming remains committed to growth, however, we will only pursue transactions that are financially sound, fit well with our existing business and offer attractive long-term returns for our shareholders,” Smith said in the release. “Clearly, this opportunity no longer meets these criteria.”
Two more properties — Green Valley Ranch and Aliante Station — aren’t part of the bankruptcy or the auction and Station said in court papers that efforts continue to restructure their debt. The Greenspun family, owner of the Las Vegas Sun, is Station’s partner in those properties.
Good! Boyd doesn't need to be buying this white elephant, they need to be figuring out how to fix the mess they created on the north strip area after the implosion of the Stardust and the abandoned construction Echelon disaster..
Further more, A New Stardust Hotel/Casino with attached wave machine pool water park, go cart track, trampolines,Minature golf, driving range, shooting range, food courts etc.. You get the picture, AFFORDABLE LEISURE VACATION!!!!
The BK judge really screwed this one up.
I support Boyd's decision myself.
I think Boyd realized you can't win a battle that was fixed from the start. The Fertittas probably had this all planned before they even declared bankruptcy.
I wish I can go bankrupt and come out ahead still owning the properties at discount prices. After this is over u can expect the Bankruptcy judge to get a high level position with Stations.
Sounds like boyd gaming seen that the requirements for everyone other than the insiders were seller demands!
Boyd is easily smart on this.
Those terms make no sense for an outside buyer at all.
Good call Boyd.
Talk about confusing... I would suspect that the lawyers are getting paid on this deal.
Check out my always entertaining and informative LV blog:
http://jimmyhoofa-lv.blogspot.com/
Good move on Boyd's part. Just finish Echelon.
Boyd has enough properties in this tumbling casino industry in Las Vegas. More investments would mean more exposure but not necessarily mean more profits. The BYD stock has been tumbling for quite a while now. It was a 13 dollars not too long time ago, and now? It's at 8 dollars and some change. That may look like it's cheap or not. May it be whatever people think. The Orleans is the No 1 locals casino by profits, without any doubt, due to a fantastic location, it's attracting locals and tourists alike. And this property plus the Gold Coast with this enormeous share of Asian gamblers playing mini baccarat they're on a solid foot there. I think purchasing Texas Station, Santa Fee plus the two Fiestas would add substantial revenues to the company. From this point of view, it was correct to fold the hand in that situation. May other investor burn its fingers on it. I like Santa Fe Station, but mainly because it's not so crowded. For a tourist, Santa Fe Station is a nice property to spend a few days of easy gambling, but that's about it. I think this casino doesn't fit into the cathegory as a "cash cow". And Texas Station is tumbling, too. Not enough money to lose in that neighborhood. Too many people looking for bargins and grabs, but not enough people with pockets full of money to burn out there. That's exactly why Station wants to get rid of it and keep only the profitable casinos, at a low cost. Which is a pretty nasty move from my point of view. Somebody will lose big money on that deal. But not them (the Fertittas).
From Switzerland
sorry for the writing error.....of course, i DON'T THINK that the purchase would add substantial additional revenues to the company (BYD).
Nancy Pelosi and Harry Reid should enter the fray and buy it.
Then they could run it into the ground like everything else they do.
Mark from Switzterland
There is no Switzterland on this planet, boomer.
chazbean Says: "I wish I can go bankrupt and come out ahead still owning the properties at discount prices."
Millions of homeowners are doing just that. This is just bigger numbers. People are hating on Stations for doing what the American public has been doing for years.
Stations pay checks don't bounce and they employee 1000's in this valley.
Why hate on those keeping this valley going?
When is the last time you saw a BK homeowner employee anyone besides an attorney?
vegaslee......... If u can understand this i will repeat it. Stations ran their properties to the ground and they are being allowed to repurchase the casinos at favorable rates. Your analogy with homes is not the same. Stop this crap with Stations checks not bouncing. They are BANKRUPT! If the sale was honest maybe some Casinos would bid on them. They will be worse off next year.
They (Station Casinos) started giving only 1 comp point for every 4 dollars coin-in on the Optimum Play videopoker machines. I noticed that and quit playing at Station Casinos. In fact, it has to be mentioned that Boyd Gaming took out all of its Optimum Play machines. I wasn't excited to notice that when I saw that there wasn't any single Optimum videopoker machine at the Suncoast. It was the last day I gave them any action out there in Summerlin.
They (Station) cancelled some of the better poker promotions and still keep dragging in the players by offering a super hard-to-hit bad beat jackpot. 150,000 or 240,000 usd jackpot, but then , if it really happens, do the math...you won't get that much of money, your hope is to get a players' share at best, while you're playing at any Stations property the moment when some lucky dog hits the bad beat jackpot.
The buffets are good and with a coupon they're always worth a visit, but the rooms are too expensive as they add ridiculous resort amenity fes on top of it, making the room rates anything but affordable.
To summarize: Station Casinos will have a tough job to do to get back on track and win the players' loyality.
From Switzerland
It obviously looks like an insiders arrangement to retain these properties.
If Boyd wouldn't bid on them due to the bidding terms, who would?
Man, talk about juice.
Stations pay checks don't bounce and they employee 1000's in this valley.
The drug cartels employ thousands of drug dealers in town too. Does that make it ok?
"Boyd Gaming's Smith said provisions in the bidding process make it difficult for qualified bidders to complete on a level playing field."
------------
Complete? If accurate, they meant what they said.
I have worked at Texas Station since they opened 15 years ago. Things have really changed for the worse. The employees can see what the guests want from Stations, but when we are asked by management what can we do to improve things, they don't listen. They are only concerned with their profit. Every time business drops, management says it is due to our poor customer service or because people have less to spend due to the economy. People still continue to spend, but are tired of losing really quick on the machines. Coco's is hardly ever busy or even half full most of the time. I don't care who owns Texas, as long as I can keep my job and benefits. Also, I would welcome the Union so I can get a pension.
It took Boyd long enough to figure out the fix was in.
How the heck can people who ran the company into the ground be allowed to be the "new" management group?
BoreUS, You go dude. Your post outstanding. I to am very tired of reading the Swiss tourist comments. Boyd just need to bring back the Stardust.
I don't care who owns Texas, as long as I can keep my job and benefits. Also, I would welcome the Union so I can get a pension.
Read below from the NY Times. The reason why Stations and Corporate America are thriving and most of us aren't. Pretty pathetic look at the greed of Corporate America.
http://www.nytimes.com/2010/07/31/opinio...
Seems like this judge has been in Station's pocket from the start. There was no victories for any party that opposed Station's plans. Someone should look into this... Maybe the judge's bank account?
WizardofOz,,,,, Sure its easy to play the game when you are the one stacking the deck..... Boyd sees this as a cheap hand to throw away... Lets see if Stations can pull a casino out of their A$$ after this deal goes in their favor...
chazbean,
All their casinos are making money, they just could not service their debt.
You keep saying they have "ran the company in the ground" yet you have nothing to back that up. Just your opinion, no facts.
They did the same has homeowners, took on to much debt, nothing more.
A little common sense will tell you that if you used any.
VEGASLEE.......Whose fault is it that they couldn't service their debt? Are u their outside auditor? Harrah's , Riveria , MGM are a few that are bankrupt ( Liabilities are more than their Assets )
Bring back the Stardust!
hey boomer, were you in amnesia during g.w.'s years in office. give aways to all these as-h---- rich people, how's that workin for ya, you betcha
on stations, they lost us a long time ago, as long as the sons are running the place you can forget our play.
toformervegas76........... Have u ever gotten a job from a poor man? Your a jerk!!
jaquekeno, the article you linked just re-enforces what I have been saying for the last five years. Corprate greed is a cancer that is going to put this nation under. The greedy pigs know as CEO's think of themselves as celebs and are only concerned about themselves.
Shameful.
I believe that BYD would have done great with these assets, provided they were purchased at the right price (and under good terms). Lets not forget that these assets are primarily 3rd tier assets that Station essentially wrote off as impaired and was willing to part with. Anyway, BYD probably did the right thing in parting ways with them too and Bond holders essentially get nothing...forgot, they get the opportunity to pony up more money! BTW, this type of restructuring has been done by The Donald 3x already in NJ. You can blame the Fertittas for taking advantage of the law!
i heard a newer floor manager being told by their superior on the floor of red rock last week to "not apologize to the customer". wow. right in front a bunch of potential customers. no wonder that place is a ghost town when they aren't having a swipe-scam promo, that and none of the machines pay out. when $5 dollars lasts less than 2 minutes on a .1c machine, what incentives do i have to increase my bets or keep playing? not to mention their boarding pass rewards club makes no sense in terms of structure, points and comps. 1500 points in one day got me a different color club card at the red rock. wooohooo!
i'll just stick to poker and blackjack and not at any station properties.
To.CCH89148............ ALL the Casinos have TIGHT SLOTS. Just bring a few hundred dollars and Play FULL paying machines ,and don't be GREEDY!!!
Vegas has to understand that the rules have changed. There are now at least 38 states that have casino or casino type gambling instead of just the two states that held a monopoly on it.
Corporations and corporation mentallity have taken over control operations and sit boardrooms away from the actual operations. The one great hope for Vegas is that the other states tax the
$hit out of gambling and Vegas hotel rates and travel rates remain low to attract the rest of us.