True to form, Carl Icahn sprang when you least expected him to, sneaking up on Penn National Gaming in bankruptcy court to outbid it for the bankrupt Fontainebleau in the first round of bartering (a process that will drag into January). Question is: Does this make Icahn like the dog who caught the car? And: Would it be cheaper to implode F-bleau than finish it?
I’m not the only one thinking the real winner is Penn. This morning’s bulletin from J.P. Morgan tacitly urged Penn to stop its F-bleau madness, noting that it “would be a positive for the stock.” It also tactfully remarked that Penn had a plateful of other projects (“WV table games, PA table games, Ohio Issue 3, New York Aqueduct, Maryland and Kansas new builds“).
Just speaking for myself, Penn committed a tactical blunder in saying, after declaring its interest in F’bleau, that of course it would only take the project on in tandem with a major hotelier. That’s the same sort of blunder Morgans Hotel Group made when it overpaid ($770 million) for the Hard Rock Hotel and then started casting around for joint-venture partners to take two-thirds of the cost onboard. Lotsa luck. Face was saved by selling the HRH back to the bank via a holding company that functions as an ill-concealing fig leaf. Penn, were it to obtain F-bleau, would find itself negotiating from the same position of weakness in which Morgans placed itself.
As for this, I’m totally gobsmacked: “Fontainebleau’s representatives have had meetings with more than 40 other interested parties.” Forty potential suitors for F-bleau? Holy crap.
Pinnacle moving ahead. Instead of freezing action (again) on its two new Louisiana riverboats, Pinnacle Entertainment will be going forward more or less as planned. Morgan stock analysts don’t like this but it can only be a positive for the Lake Charles and Baton Rouge economies, which have seen these two casinos go to and from the back burner. The Baton Rouge project remains as planned but the budget for Sugarcane Bay has been slashed by $102 million and the casino-hotel will be made symbiotic with L’Auberge du Lac. The ostensibly interim Pinnacle administration sure is acting like it plans to stick around awhile.
On the road: This edition of S&G comes to you from the 28th floor of the San Francisco Hilton, scene of a massive and rowdy convention of narcotics-unit cops. It’s like being right back in Vegas: a lobbyful of beefy conventioneers with tragic facial hair and Ed Hardy t-shirts. Though if I were a narc, I’m not sure I’d walk around wearing a nametag stating my profession.
We’re in The City (as local parlance has it) for my sister’s birthday, to be followed by a jaunt to Chicago for Thanksgiving with my Dad. Sadly, the morning was marred by a bit of a set-to with some family members when they tried to shanghai me into some involuntary sightseeing after I’d made it clear I needed some quality time with my S&G readers. Then I got “longhauled” by a taxi driver. In his case, I’d say a 75-cent tip is hardly “stiffing,” although your mileage may vary, so to speak.
Un-burned Bridges. Former Playboy cover girl Angelica Bridges has returned to 
Once is too much. Word through the Dancing with the Stars grapevine is that Wayne Newton was and continues to be very close to the professional dancers on the show, remaining good friends with former partner Cheryl Burke (left, on opening night) and putting up Kym Johnson in his guest house when she comes to Vegas to rehearse with the Flamingo‘s Donny Osmond. However, Wayne the Mensch is less of a pressing concern than Newton the Trainwreck. The Wayner’s Tropicana show is not merely bad, it is 
“There’s a sort of desperate, delusional Sunset Boulevard quality to this vanity project. At times it feels like we’ve all been cornered by ol’ Uncle Wayne and forced to watch home movies and the History Channel in his rec room at Casa de Shenandoah.” — Las Vegas Sun critic Joe Brown, 
The ravages of the depression on Nevadans’ wallets were felt, though, with locals casinos posting a 22% plunge (-28% on the Boulder Strip). At least the addition of Aliante Station cushioned the blow for North Las Vegas, down a mere 8% — and the only revenue-positive market of 2009.
“The best balance sheet in gaming.” That’s what J.P. Morgan analysts say about Wynn Resorts. They like it even more if Wynn’s Cotai Strip™ project gets built. They estimate it could add as much as $13 value per share. Wynn doesn’t have the biggest market capitalization or cash flow, but his debt schedule puts Las Vegas Sands and MGM Mirage to shame. He’s slated to be down to just under $1 billion in two years, when LVS and MGM will be awash in $11 billion and $12 billion in net debt, respectively.