Less than two years after the old San Remo was sold for $67.5 million and transformed into Hooters at a cost of another $60 million, the hotel-casino has received a buyout offer from a private southern California-based investment group called NTH Advisory Group. The bid price is $225 million, including $95 million cash and the assumption of $130 million in debt.
Though the offer has been publicized as "unsolicited," the principal in NTH, Richard Bosworth, is considered an insider. He's been a member of the transition and development team since Hooters bought out the San Remo. According to the NTH Web site, Bosworth was involved in "site selection, acquisition negotiations, and acquisitions due diligence; [he also] structured and negotiated all loan documents and joint-venture partnership documents, assisted in design elements, and provided a significant portion of the pre-opening operational preparation." Hooters principals have called Bosworth a "consultant" to the hotel-casino. So this looks like something of an insider buy-out to us.
As such, we're a little surprised by the size of the offer. Hooters has struggled to find its place in the Las Vegas casino business since it opened exactly a year ago. The casino's marketing strategy has relied heavily on the Hooters brand, which is popular enough with a younger blue-collar crowd, but is obscured by the many nearby megaresorts in whose shadows Hooters resides. Also, there's nothing new in this town about sexy women in skimpy uniforms -- the whole hook of Hooters -- even if the outfits are a distinctive orange.
Insiders say that Hooters has attracted plenty of visitors, but they've been mostly "younger impulse visitors," rather than the older slot-playing couples who support most casinos. Indeed, the Hooters slots have averaged a daily win of $67 per machine, whereas the Las Vegas average is $100 or more per day. In addition, the occupancy rate at Hooters has been a disappointing 70%-75%, compared to the above-90% average throughout Las Vegas. Put them together and Hooters lost $16 million in its first nine months of operation.
Still, the fact that an insider is willing to cash out the existing owners at a premium speaks highly to the potential for this property over the long haul (though financing details for the purchase haven't been revealed).
NTH Advisory Group has until Feb. 12 to deposit $1.1 million in good-faith money into an escrow account. An inspection and due-diligence period will follow. The parties have to agree to the sale or part ways by March 15. Check "Today's News" on the home page for updates as this situation proceeds.
