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Fertittas to buy out shareholder to get majority ownership of Station Casinos
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Frank Fertitta III
Station Casinos chief executive and chairman
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Lorenzo Fertitta
Station Casinos vice chairman
LAS VEGAS REVIEW-JOURNAL
Station Casinos LLC minority owners Frank Fertitta III and Lorenzo Fertitta plan to buy out another shareholder for $73 million, giving the Fertitta family majority ownership of the gaming company founded by their father, Frank Fertitta Jr.
In a regulatory filing with the Securities and Exchange Commission on Monday, Station Casinos disclosed that FI Station Investor LLC, a company affiliated with the Fertittas, plans to purchase shares held by JPMorgan Chase Bank N.A.
"Frank and Lorenzo Fertitta's new investment into Station Casinos LLC demonstrates their continued commitment to the company as well as their belief in the Las Vegas locals market," company spokeswoman Lori Nelson said in a statement.
The company's capital structure is composed of four separate entities consolidated under Station Casinos.
The deal, if completed, could mean JPMorgan would lose its right to "designate a member of (Station's) board of managers."
JPMorgan appointed veteran gaming executive Stephen Greathouse to the board.
JPMorgan acquired its 15 percent ownership stake in Station Casinos last year under a deal in which its debt was converted to equity during the Station bankruptcy. JPMorgan declined to comment Tuesday.
As the company emerged from bankruptcy last year, the Fertittas owned 45 percent of Station Casinos, while Deutsche Bank AG owned 25 percent and JPMorgan and former bondholders each held 15 percent.
If the deal closes, the Fertittas could own 60 percent of Station Casinos.
Station Casinos, started as a single property called The Casino opened by the late Frank Fertitta Jr., celebrated its 35th anniversary July 1. Station Casinos filed for bankruptcy protection in July 2009 after the company had difficulty servicing more than $6 billion in debt.
Separately, Station Casinos disclosed Monday that its financial report for 2011 will show net revenue of about $1.178 billion compared with $1.14 billion in 2010.
Net revenues were expected to top $636.5 million in 2011, compared with $591.7 million last year, the privately-held gaming company said.
EBITDA was projected to be $284 million compared with $280.1 million last year, the company said. EBITDA, which is a key measure of profitability, is defined as earnings before interest taxes, depreciation and amortization.
As of Dec. 31, the company's outstanding debt was $2.5 billion.
Moody's Investors Service on Tuesday assigned a Caa2 rating to $625 million of Station's unsecured debt due in 2018. The gaming company has about $1.6 billion of unsecured debt.
In a report, Moody's said the rating on the new "unsecured notes reflects the large amount of senior ranking debt that reduces the recovery prospects for unsecured noteholders."
Moody's upgraded the company's senior secured ratings to B2 from B3. It also affirmed Station's B3 corporate rating and B3 probability of default rating.
"The stable rating outlook reflects our view that Station's EBITDA will begin to increase moderately due to the flow through of higher revenue to earnings, and that the company will apply free cash flow to permanently repay its debt," Moody's Vice President and Senior Credit Officer Peggy Holloway wrote in her report.
Holloway warned that the ratings could be lowered if monthly gaming revenues in the Las Vegas locals market begin to trend down or if Station's earnings fail to increase.
Contact reporter Chris Sieroty at csieroty@reviewjournal.com or 702-477-3893.
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If I had any thoughts that Green Valley Ranch was "ONE OUTSTANDING GAMING ESTABLISHMENT", that is long gone. Let it be known "THEY DO NOT LOVE LOCALS" and I'm telling everyone and anyone who will listen!
I think that's a bit of a stretch, stationary, but I see the point you're trying to make. I think we kind of agree that they're all bad. I was addressing the union shills come on here and blast the Fertittas and act like they're the only ones that strategically filed for bankruptcy, or restructured their debt, after the recession hit. That doesn't make what they did a good thing, it's just that others are ignored. The way the union has disingenuously attacked the UFC in NY, just so that they can try and muscle them into supporting their efforts to unionize Station. The fighters get hurt, the local NY economy misses out on a great opportunity, just because certain key politicians are in the pocket of the slimy Culinary union who have a beef with another Fertitta business in another state. It's sickening.
ImproveLV, drug lords employee a lot of people too. Shall we honor them with the same accolades that are bestowed upon the Fertittas? To state that the Ferittas are more honorable than the unions is tantamount to stating that Stalin was better than Hitler.
haha! Homer, you're funny. Yes, I'll "get off my knees and give the Fertittas rear end a break" because I don't blindly support some corrupt union. Good one, bud.
Let me simplify for you...I think what the Fertittas did is bad, but I also think the thousands of Vegas homeowners walking away from their responsibilities is bad. In my mind, the two are very similar. I also think that many of the banks are bad, and they never took the lumps that they deserved to take. I also think the union is acting like the corrupt thugs that they are, and anyone not involved with them, or any other union, can see it. You're all dishonest and corrupt people/groups. The only really good thing about any of you involved is that the Fertittas employ a lot of people.
The Feds need to get involved in this traversty.
WOW! It appears by the comments here today that I am not alone in my thoughts about station casino's! I AGREE, reopen the bankruptcy, security and excahnge should reject proposal, TV ads about the brides has run it's course, slamming the culinary, and they are probably writing off the cost of the ads, and those ads were as bad as the ones where they help employees with citizenship and houses? How the hell were they working there to begin with? BIG MONEY still talks in this state and BS walks. MONEY for Lawyers can save you 4BILLION by filing bankruptcy???
Now here something for the feds to look at!!!!!!!
InproveKV Get off of your knees and give the Fertittas rear ends a break. I know employees who were victims of firings for no cause during the Fertittas bankruptcy scam. Those employees given the opportunity would vote for a union today to protect thye from these thugs. Lets not forget the many unsecured small businesses that went broke during that sham of a bankruptcy so these thugs could game the system.
Labor disputes aside, Depressing, scary, menacing commercials, played every 20 minutes, all morning, do NOT make me want to spend my hard earned money in a casino. I get it, the Fertittas have tons of money, but to play those commercials, ALL DAY LONG, makes me want to take a nap, not to gamble.
Boy, the union shills are sure out today.
Lots of people have made huge mistakes in the past decade. Don't pretend that it's only limited to big business. These guys are like the huge % of LV homeowners that took on too much debt, bought too much of a house (or spent too much money building casinos), then negotiated a deal with the bank (or lenders). I disagree with it, but it's the reality of the situation. At least these guys are employing a huge # of people in town, and they are investing in the local economy.
And I think the attacks by the Culinary Union against the Fertittas are disgusting. Fighting against a growing business like the UFC, just so that you can get the Fertittas to support your efforts to unionize the Station properties. That's like the dirty, slimy tactics that the mob used to muscle their competition around. I'd be ashamed to be a part of that group. Rationalize all you want, the fact is that it's embarrassing, and bad for the national economy.
Some hope that the pictures of the brothers that accompany this article do not morph into mug shots.