Palms And Aliante Acquisition Deals Get Approval From Nevada Gaming Board
The Nevada Gaming Control Board voted unanimously on September 7 and approved the acquisition deals for both the Palms Casino and the Aliante Casino Hotel. A subsidiary of Red Rock Resorts is acquiring the Palms while Boyd Gaming is purchasing the Aliante Hotel. The Nevada Gaming Commission is expected to review both deals on September 22 and make a final decision on the matter.
Boyd Gaming announced in April that it was planning to purchase the Aliante casino hotel in North Las Vegas which has 211 rooms for $280 million while Station Casinos which is the parent company of Red Rock Resorts stated in May that it was going to purchase the Palms property for $312.5 million. The Palms facility has a total of 700 hotel rooms and 600 condominium units.
Station Casinos was interested in acquiring the Palms property as it was located near the Strip and would be a major asset to the company. Station Casinos is financing the purchase of the Palms property from TPG Capital and Leonard Green & Partners LP who each have a 49 percent stake in the venture, putting down $200 million in cash and an additional $150 million in a financing deal. The Palms property was acquired at 53 percent of its original cost since its current cash flow is 60 percent lower than its peak.
There were around 25 Culinary Union members present when Richard Haskins, Station Casinos president made a presentation on the Palms acquisition to the board. Palms employees do not have any union representation but have been assured that they will not lose out on their seniority, salary or any other benefits when they shift to working for Station Casinos.
Marc Falcone, the chief financial officer told state regulators that the company planned to retain most of the 1,700 employees at the Palms. The control board appeared to be quickly satisfied with the information provided and moved quickly to the Aliante deal, so quickly that Boyd’s executives were yet to arrive for their meeting.
Chairman Bill Boyd informed the control board that Boyd Gaming was also in the process of buying two Cannery Casino properties along with the Aliante hotel casino and believed that these three acquisitions would give the company a presence in new areas in the valley. Boyd Gaming currently controls 21 properties spread across seven states and wants to expand its presence in Nevada with the acquisition of these three properties.
Body Gaming has already invested $100 million to roll-out major upgrades to its hotels and restaurants across the country and has already completed makeovers at the Gold Coast, Suncoast and The Orleans. Next in line for a makeover are the Sam’s Town and Boyd California properties. Boyd Gaming does not plan to make major upgrades at the Aliante property as the ex-owners have maintained the property very well.