Boyd Gaming Should Buy Station Casinos: Poll
NEW YORK (
) --
Boyd Gaming
(BYD) - Get Report
should purchase Station Casinos assets, according to
TheStreet
readers.
In our weekly poll, 60.5% of voters said Boyd was the most logical choice to pick up any assets the now bankrupt Station Casinos sells off.
Last week, Station Casinos announced that it is looking to sell 14 of its casinos in bankruptcy court.
According to a Securities and Exchange Commission filing, Station plans for investment banks
Deutsche Bank
and
J.P. Morgan
(JPM) - Get Report
to take over four of its debt ridden casinos: Red Rock Casino Resort Spa, Palace Station, Boulder Station and Sunset Station. The debt on the four properties would be reduced from $2.48 billion to $1.6 billion.
Owners Frank Fertitta III and Lorenzo Fertitta plan to retain a 46% stake in the four casinos. Under the proposal, the brothers will pay $85.6 million in cash for a 50% stake and then sell 4% of that stake to
Colony Capital
. Colony currently holds 75% of Station.
Station's remaining properties, which include Santa Fe Station, Texas Station, Fiesta casinos and 50% stakes in Green Valley Ranch Resort Spa Casino and Aliante Station, among others, would be sold.
Boyd has been vocal in its desire to buy Station's assets since it went into bankruptcy last summer with $56 billion in debt.
"We also believe it is best positioned to enhance certain Station operations quickly in the local Vegas market, given obvious synergies with its own local Las Vegas portfolio in terms of marketing and management," Sterne Agee analyst David Bain says.
Last year, Station rejected Boyd's offer of $950 million for 14 casinos. Boyd upped its bid in December to $2.45 billion, but that, too, was rejected.
Penn National Gaming
(PENN) - Get Report
may also look into picking up some of Station's pieces. In the poll, 15.7% of voters said Penn would be a good match.
Penn has been eying the Las Vegas market. It made a bid for the bankrupt Fontainebleau, but lost out to billionaire investor Carl Icahn.
While Penn does not comment on assets that may be of interest, spokesperson Joe Jaffoni says "it is reasonable to assume that the company evaluates nearly all gaming assets that are being offered for sale based on a strategic fit and potential return on invested capital."
It's not likely other national casinos will purchase Station's leftovers. Just 10% of voters said they would want to see
Las Vegas Sands
(LVS) - Get Report
make a bid, 7% voted for
MGM
(MGM) - Get Report
to do so, and 6.8% said
Isle of Capri Casinos
(ISLE)
was the one to make the buy.
Station has been struggling along with the Las Vegas local market, where the bulk of its casinos are located. Earlier this week the company said it lost $1.13 billion in its fourth quarter, weighed down by heavy write-downs totaling $1.29 billion.
Still, this is a smaller loss from the fourth-quarter of 2008, where the company recorded a loss of $3.37 billion.
Revenues dropped 11.5% to $256.5 million from $289.8 million.
Whoever purchases Stations assets will have to contend with these difficulties.
-- Reported by Jeanine Poggi in New York.
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