Will Carl Icahn Rescue The Fontainebleau?
I've been following the fate of the Fontainebleau Las Vegas casino resort for a while now. It looks like the stalled project may have a new savior in the form of billionaire investor Carl Icahn. Icahn's Icahn Nevada Gaming LLC will be the opening or 'stalking horse' bidder in an auction of the resort after Penn National Gaming Inc. dropped out. Bloomberg News reports on the bidding war in court which led to Icahn offering $105 million, plus $51.5 million in debtor-in-possession financing besting Penn's offer of a total of $145 million. This means that the Icahn bid will be the one to beat.
The planned complex on the Las Vegas Strip is about 70 percent complete. It filed for bankruptcy in June and may cost around $1.5 billion to finish. Fontainebleau's sellers have asked U.S. Bankruptcy Judge A. Jay Cristol in Miami to auction the casino on January 21. Penn National Gaming had planned to finish Fontainebleau with an unidentified partner and to use the company's database of casino customers to help fill the casino with consumers. Icahn has a history of buying bankrupt casinos (including the Stratosphere in Las Vegas) and selling them for big profits. His entry into the fray may increase interest in the January auction and help ensure that someone eventually buys the casino and finishes the project.