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CAMDEN — Billionaire and former casino owner Donald Trump is the self-proclaimed master of the “art of the deal.” But billionaire and soon-to-be casino owner Carl Icahn seems to be the master of the art of the steal.

In strikingly similar fashion to his bargain-basement purchase of the Sands Casino Hotel nine years ago, Icahn snapped up the Tropicana Casino and Resort in a bankruptcy sale for the steeply discounted price of $200 million.

Icahn and a group of fellow lenders aren’t even paying cash. Instead, they are canceling $200 million in debt from a $1.4 billion mortgage they currently hold on Tropicana in exchange for ownership of Atlantic City’s third-largest casino hotel.

A bankruptcy court judge in Camden approved the sale agreement Friday during a 40-minute hearing that culminated what had been an 18-month quest to find new ownership for Tropicana amid the faltering economy. Tropicana has been on the market ever since the troubled former owners were stripped of their New Jersey gaming license in 2007.

Originally expected to sell for $1 billion or more, Tropicana’s value shrank dramatically as the recession deepened and the Atlantic City gaming industry withered. The Icahn-led lenders timed the market downturn perfectly by stepping in when no other investors were willing to bid on Tropicana to drive up the price. Other tentative offers ranging from $575 million to $950 million never made it beyond the discussion stage.

“There is basically no other option available at this point,” U.S. Bankruptcy Court Judge Judith H. Wizmur said while approving the bare-bones sale.

The deal is pending regulatory approval by the New Jersey Casino Control Commission and final closing, a process expected to take until year’s end. The Icahn group will officially take possession of Tropicana at that time.

“The process is winding down and moving in the right direction,” Tropicana president Mark Giannantonio said.

Giannantonio added that the casino will continue operating as normal and customers should not notice any differences during the transition to new ownership.

Icahn did not attend the bankruptcy hearing. His attorney, Oscar Pinkas, said Icahn is pleased about buying Tropicana, but declined to say whether any changes are in store.

“He’s very confidential about his business operations,” Pinkas said of Icahn.

Icahn, a super-investor who specializes in buying distressed properties and reselling them for a healthy profit, is getting back into the Atlantic City casino business. Similar to the way he is buying Tropicana, he acquired the Sands Casino Hotel in a bankruptcy sale in 2000 for the dirt-cheap price of $65 million. In 2006, he sold the Sands for $270 million to gaming company Pinnacle Entertainment Inc., which imploded the casino to make room for a proposed megaresort.

He has also displayed his deal-making prowess in Las Vegas. In April 2007, Icahn’s American Real Estate Partners LP investment firm sold the Stratosphere Casino Hotel and three other smaller Nevada gaming properties for $1.3 billion, reportedly at a $1 billion profit.

Icahn’s purchase of the Atlantic City casino is a key part of his plans to acquire virtually the entire Tropicana Entertainment LLC gaming empire. Tropicana Entertainment and its corporate affiliates lost control of the Tropicana casino when their New Jersey gaming license was revoked in December 2007 following mass layoffs and regulatory violations.

In a separate bankruptcy case, Icahn is lending Tropicana Entertainment $150 million to help it emerge from Chapter 11 protection as essentially a new company. His investment will increase his ownership stake in the company’s portfolio of casinos in Nevada, Louisiana, Mississippi and Indiana.

As part of the new ownership structure, Icahn and his fellow lenders will consider operating Tropicana as a stand-alone casino or combining it with the existing Tropicana Entertainment gaming halls. Whichever route is chosen, it must be approved by the Casino Control Commission in the licensing process. It sets up the possibility that Tropicana Entertainment could return as the operator of Tropicana nearly two years after it lost its license.

Tropicana includes 3,400 employees, 2,129 hotel rooms, about 140,000 square feet of gaming space and a mall-like retail and entertainment complex called The Quarter. Built in 2004, The Quarter cost $285 million — more than what the Icahn group is paying now for the entire Tropicana casino hotel.

E-mail Donald Wittkowski:

DWittkowski@pressofac.com

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• Bidding for Tropicana casino starts at $200 million
• Tropicana Entertainment bankruptcy plan approved by court
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• Casino Control Commission gives ultimatum on Trop sale: Make deal or commission takes over
• Icahn looks to buy Tropiciana casino dirt cheap
• $200M. is opening bid for Tropicana
• Tropicana's ex-owner reaches deal on bankruptcy restructuring plan

12 comments:

• weisenthal (261) posts 12:12 pm

  Reality is nothing more than a completely powerless, helpless little antismoking nazi, a mentally ill miscreant who assisted in bring Atlantic City to it's present decline and fall. In spite of her gang's efforts, freedom prevails in what's left of the casinos.

• slothead2 (3) posts 8:08 pm

  DEAR MR ICAHN, WILL YOU NOW PLEASE GET RID OF THIS GOD AWFUL MANAGEMENT THAT HAS MADE THE TROP THE BIGGEST TOILET IN TOWN !!!! AND NO SEVERANCE PACKAGE FOR ANY OF THESE DOPES !!!! GET READY TO START CLEANING TOILETS MARIO. IT'S THE ONLY JOB LEFT IN THE CASINO INDUSTRY FOR YOU AFTER RUINING THE TROP. NO SEVERANCE PACKAGE FOR YOU MARIO, JUST A KICK IN THE BACKSIDE. MR ICAHN ARE YOU LISTENING ?? DENNY BOY

• misterrick (1) posts 3:28 pm

  It should have been noted that the Tropicana in Las Vegas is not part of Tropicana Entertainment anymore, it was recently acquired by Canadian investment firm Onex Corporation who like Icahn bought the Tropicana Las Vegas property out of bankruptcy. One of the first things Onex did was hired former MGM MIRAGE CEO Alex Yemenidjian to run the day to day operations of the Tropicana Las Vegas.

• Jamesy (67) posts 8:14 am

  POOF!...it will dirt and a vacant lot within three years.

• Andy2009 (6) posts 8:06 am

  Well I am glad its finally over,now lets get rid of Judge STEIN who was making 650.00 per hour and also Trop needs new management,people who are there for over 20 years must pack their bags with uncle stein and leave Trop,it is sold at cheap price but lets not forget that $900,700,500 millions were offered before but greedy management wanted to make money for themselves so they and STEIN were just delaying sale,FEDS should kick in now and have an investigation.

• ladylisa (1) posts 7:40 am

  Reality Please what planet are you from?? Take a chill pill.

• Pinesboi (10) posts 7:26 am

  If Trop is worth only $200 mil what are Resorts, Hilton and Marina worth and how much longer can these dumps continue to bleed? Seems like Icon is the only one who has any money. There's plenty of bottom fishing remaining in AC. The gaming industry remains in free fall and after what already looks to be a very poor summer business, the coming fall and winter will seperate the wheat from the chaff. Maybe that will be good news for Revel. 2 or 3 less dumps in AC can only help them down the line.

• slothead2 (3) posts 7:49 pm

  DEAR MR ICAHN, WILL YOU NOW PLEASE GET RID OF THIS GOD AWFUL MANAGEMENT THAT HAS MADE THE TROP THE BIGGEST TOILET IN TOWN !!!! AND NO SEVERANCE PACKAGE FOR ANY OF THESE DOPES !!!! SLOTHEAD

• Reality (1) posts 5:20 pm

  Atlantic City needs to ban these drug addicted smokers once and for all. This will improve the win percentage. The quality of the casino customer will improve once you rid the casino floor of these cigarette junkies. These druggies are the bottom dwellers of society, banned from nearly every business in this state but the casino floor. These junkies are not wanted anywhere in this state. They are a menace to society. Who wants to be next to one of these lowlifes at a table game or a slot machine? These people are ignorant, and stink. Their breath, clothes, and hair wreak of tobacco. The casino will have happier, healthier customers and workers once these druggies are banned. These drug addicts will still come to gamble, they are animals, and animals adapt to their surroundings. It's time for these drug addicts to go where they belong, to smoke with their other fellow druggies. You junkies think you are being treated like second-class citizens? Wrong, you addicts have NO class, so being treated like second-class is a step up for you losers! This little piggy went to market, this little piggy stayed home. Do us a favor piggies- stay home!

• bhash875 (27) posts 5:01 pm

  I fully agree with Dave 202. I read in the Press that Stein was getting 650.00 an houre in's . Maybe he wasn't working 40 hours a week but what a cash cow for him. Hey I wouldn't want to sell a property and cut off the best paycheck I ever had either. What's really humorous and a lot of people don't know this is that it was Stein's son's law firm that was overseeing the sale. One would think that even in this state legislators would have been up in arms over this nepotism. I mean how could that take place? Dave 202 you are wrong it isn't Stein that should be sued it should be that fat pig Kassekert (and her fellow seatwarmers) by the taxpayers of this state. Well, at least from what I understand there will only be three monkeys on the casino control commission now. Hopefully money will be saved somewhere. These clowns in the CCC and DGE make me laugh. They are still patting themselves on the back about breaking up the sports betting ring at the Borgata. It was revealed that someone came forward and tipped them off.Real sharp investigators. They are really good at investigating.... the bottom of a doughnut box.

• Apostle (1) posts 2:32 pm

  Okay Gary please hand in your resignation and try to explain to your dupes why Ichan dosen't pay retention bonuses. Hope they won't mind you telling them this from your new vacation home in Maine (the mortgage free one). Now bring on the new conservator and a real management team that has everything to prove and will.

• American_Gaming_Guru (128) posts 12:31 pm

  This abomination of government intervention into private enterprise finally over! It seems that so many have made a bundle off of the backs of the Trop and its employees. Congrats NJ, Stein et al. BTW, I hope the Trop goes in for a property re-assessment, since all the nitwits in the media keep referring to its sale as a "Bargain Basement" and "heavily discounted price of $200 million"; which is completely mis-leading. The Trop has a great argument here for re-assessment based on this so-called sales price and an opportunity to take back funds that has so scrupulously been fleeced from them.

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