Fontainebleau The New Tropicana?
Carl Icahn has taken over for Penn National Gaming as the leading bidder for Fontainebleau in Las Vegas. As the “stalking horse” bidder Icahn’s bid has to be bettered in next years auction.
During a hearing in Miami’s bankruptcy court, Penn National Gaming initially competed with Icahn but then dropped out of the bidding after going as high as $145 million.
Penn National last week offered $101.5 million — $50 million in cash and a loan of $51.5 million to be the stalking horse bidder. Penn National has been looking for an opportunity to enter the Las Vegas gaming market.
As the stalking horse, Penn’s bid would have been the price to beat by other bidders in an auction likely to occur early next year. With loan and other fees it negotiated, Penn also stood to recover some of its investment in expenses and its executives’ time working on the deal.
Carl Icahn is no stranger to Las Vegas or to similar kinds of scenarios. Last year he won control of the Tropicana in Atlantic City and controls Tropicana Entertainment.
If Icahn wins control of Fontainbleau I can see him taking the Tropicana name and re-branding Fontainebleau, which has a little stink on the name. This move would take the Tropicana brand into the new century while allowing for a less expensive branding for the hotel that is currently the Tropicana.
This is all my speculation on a possible scenario, but with a little thinking behind the idea this idea could work well for all parties involved.
Photo: Vegas Today and Tomorrow
