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Boyd makes another move to get Station Casinos' assets

Boyd Gaming Corp. filed a motion today in Station Casinos' bankruptcy proceedings, asking the court to allow the casino operator to submit a reorganization plan for its financially troubled rival.

According to the motion, Boyd Gaming, which was rejected when it offered to buy a large chunk of Station Casinos in February for $950 million, is asking the U.S. Bankruptcy Court in Reno to appoint an examiner so other parties can offer competing reorganization plans.


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  • The most likely scenario from a potential Boyd plan would be the acquisition of all or part of Station Casinos, which operates 18 properties in Las Vegas, Henderson and North Las Vegas.

    Station Casinos filed for Chapter 11 bankruptcy protection at the end of July. Last week, the company asked the bankruptcy court for a four-month extension to exclusively propose a plan to reorganize its finances. The current deadline is Nov. 25.

    In its motion, Boyd Gaming said it was not opposed to Station Casinos receiving an extension until March to file its reorganization plan. Boyd Gaming is also a creditor in the bankruptcy, having acquired a stake in Station's debt.

    But Boyd wants an outside party to evaluate Station Casinos’ assets.

    “Boyd believes that the highest priority issue currently before this court is to evaluate sales alternative that realistically could compete with (Station Casinos’) attempts to reorganize with insider-retained equity,” according to the motion.

    Boyd wants an examiner to share information with both Station Casinos and other interested parties, which would allow the reorganization process to move forward on quicker basis.

    In the filing, Boyd Gaming said it is unable to make another offer for Station Casinos until its rival’s finances and properties have been evaluated. Boyd said Station Casinos’ management never realistically considered its February offer.

    Boyd said anything learned by the examiner wouldn’t be “competitively harmful” to Station Casinos.

    “Boyd expects that the expert serving in that role will arrange to provide the data needed for informed bidding, so that potential buyers like Boyd can provide data on value that (Station Casinos) cannot dismiss as being too hypothetical, conditional or nonbinding,” the motion stated.

    Boyd Gaming spokesman Rob Meyne declined comment beyond the 38-page filing.

    Station Casinos spokeswoman Lori Nelson declined comment on the filing.

    Boyd Gaming Chief Executive Officer Keith Smith said last week the company has a $2 billion credit revolver, once designated for the now-delayed Echelon, which can be directed toward acquisitions. He said Boyd was serious about acquiring all or a portion of its rival.

    "Let me be clear. This is a serious offer," Smith said. "Bankruptcy can be a distracting and expensive process, and it does not appear to be in the best interests of anyone for this to drag on."

    Smith said buying key assets within Station Casinos' 18-property portfolio in Southern Nevada makes sense for all parties, including Boyd Gaming shareholders, customers, and Station Casinos' creditors, employees and customers.

    "We can deliver more value to the creditors with a fair offer and these assets," Smith said. "We believe strongly in the long-term viability of the Las Vegas market."

    Station Casinos filed for bankruptcy protection on July 28 with roughly $6.5 billion in long-term debt.

    Creditors are feuding over portions of Station's November 2007 transaction in which it was taken private by an affiliate of Los Angeles-based investment firm Colony Capital and the Fertitta family, which founded the company.

    One group of creditors believes Station Casinos' board may have had conflicts of interest when it rejected Boyd Gaming's offer to buy most of Station Casinos' assets and when it arranged financing for the company's buyout.

    The lenders are questioning whether the buyout's financing, which is divided into three stacks of loans, each with different investors but all controlled by Station Casinos' board and administrating bank, Deutsche Bank, might be improperly benefiting the company and its primary lenders at the expense of the smaller lenders.

    Company attorneys told the judge extending the timeline could save time and money while allowing Station Casinos to come up with plan "that has the best possible chance of success for the reorganization of the Debtors' businesses."

    Station Casinos also manages an American Indian casino near Sacramento, Calif.

    Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.

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    J Dubs wrote on November 04, 2009 11:27 PM: Tear down the strip eyesore first. Then worry about Stations.

    Why would Boyd spend $15M/year on maintaining the echelon site but not < $1M to raze the site and make it more tasteful for the time being.

    I wish I can rent out a billboard just to air Boyd's dirty laundry (ineptitude).


    Jack wrote on November 04, 2009 08:59 PM: Just a few years ago Harrah's was able to do what Caesar's was unable to do, which was buy the Barbary Coast, to control most of the intersection of Flamingo and the Strip. Boyd was TOTALLY against selling Barbary Coast to Caesar's. Now, the shoe is on the other foot for Boyd; they want what they can't have. Question is this...If Boyd buys Stations, wouldn't that be a MONOPOLY on the locals market? True that there are basically only 2 players on the Strip, but nowhere near the amount of properties that a combined Boyd-Stations company would control. Having so much control of the locals market is bad, just look at the Strip. If you get fired from 1 company, you only have 1 company left on the Strip. A combined Boyd-Stations company would leave any worker fired from any locals property hurting. GREED is playing the locals market, and it's name is Boyd!!


    Victor Newman wrote on November 02, 2009 01:19 PM: The Stations-Boyd rivalry is a hot and heated one, no doubt. It's like the Hatfields and McCoys right here in Las Vegas. Problem is, the hatred from both sides might be making them both crazy. Boyd has to be nuts to try to do this acquisition and if they do, it is out of pure ego. Starting Echelon and abandoning it, no matter what the excuse, is horrible. Worry about getting Echelon finished before attacking the Fertittas.


    BadMove wrote on November 02, 2009 02:00 AM: In a bad locals eniroment in wich Boyd itself said in its recent quarterly report of losses were partly because of a down Vegas locals spending - to be aquiring anothe locals place that is beaten down just does not make sense.

    Bad for the stock - bad for Vegas - they cant even finsih their own development here.

    What we need is someone that can take stations to another level and some new blood with something new - not a company that is losing and does not even do a good job promoting what it has.


    douglas wrote on November 01, 2009 11:59 PM: then why didn't the fellow who was "light years ahead" of all citizens, make that deal ? and why did he burn out the silver city ?

    silver city ustabe in my top ten to play 21. after castaways, the slipper, binion's, even the first 4 deck shoes when caesar's opened, and several downtown joints.

    i recall being "helped" by a silver city dealer. single deck, rule of 6 deck penetration, dealt a hard 16 against a dealer jack. i mused out loud..."what should i do against a jack ?". 'twas the days of dealer peek. he said "what would you do against a pair of jacks".


    dgump wrote on November 01, 2009 11:23 PM: douglas, regarding the DI: Luke Brugnara (Silver City Casino) had the DI in contract before Steve Wynn...check the LV Review Journal archives...Brugnara is light years ahead of these guys on what is going to happen.


    douglas wrote on November 01, 2009 08:44 PM: boyd seems to be the only willing and able buyer. as to their building/finishing the stardust site, could very well be that the acquisition of the obviously crippled [ravaged by the current owners], stations properties is the best place for their cash and credit.

    as to the worth of any of the stations' joints, could be that such a selected/cherry picked purchase serves two functions.

    one is to squelch competition.

    the second may mirror the wynn purchase of the desert inn acreage. i recall when that was announced, the "smart" money was ridiculing that > $200 million buck purchase. those imbeciles based their "authoritative" valuation on the losing casino operations at the d.i.

    lo and behold, the day after or so, those buffoons woke up to realize that wynnn had *stolen* a huge tract of las vegas strip land.

    licensed/permitted, casino property may become scarce, even impossible. "banking" more such bargain sites seems intelligent. sooner or later, after the "change" oaf's regime, the casino biz will get stronger. [not before]

    coolest was that wynn later resold a couple hundred square feet, to the county, for the pedestrian overpass footprint. that cost extrapolated per acre, seems to have been in excess of 50 million an acre.


    bob wrote on November 01, 2009 08:03 PM: Didnt know courts were open on Sunday.


    stevecan2 wrote on November 01, 2009 06:51 PM: As logical and educated some of these responses are, I would like to remind everyone that Stations has the ultimate trump card when being able to come up with cash on demand, the UFC.


    casinocon wrote on November 01, 2009 06:49 PM: They both suck. Loosen the machines and maybe we will start playing again. Boyd and Station Casinos could save themselves, but they are too greedy and stupid to understand that we local players aren't as stupid as we look. I play what little free play they give me, eat a dollar hot dog and drink a dollar beer, then I LEAVE!!! No sense hanging around to watch my hard earned pay go down the drain in their slots. Hello!!! It is NOT FUN ANYMORE! You blew it boys, the party is over, turn out the lights.


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