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LAS VEGAS-Winmar Tahoe Inc. (dba Columbia Entertainment), the gaming affiliate of Fort Mitchell, KY-based Columbia Sussex Corp., has completed its $3.1-billion acquisition of Aztar Corp., the Phoenix-based owner of 13 casinos including the Tropicana Casino resorts here and in Atlantic City. Per the agreement, WT-Columbia Development, Inc., an indirect wholly owned subsidiary of Winmar Tahoe, merged with and into Aztar, with Aztar surviving the merger and becoming an indirect subsidiary of Winmar Tahoe.
The deal was first announced in May 2006. After a $0.40 addition to the purchase price--approximately one penny a day from Nov. 20 until the closing date--Winmar Tahoe paid $54.40 per share and all outstanding preferred shares of Aztar for $575.35 per share, or $2.1 billion. All told, approximately $3.1 billion of senior secured credit facilities and senior subordinated notes were used to finance the acquisition of Aztar and to retire existing indebtedness.
Aztar's prize possessions are its Tropicana resorts in Las Vegas and Atlantic City. The 34-acre Tropicana resort in Las Vegas is viewed as one of the last big redevelopment opportunities on the Strip. The property is located at Las Vegas Boulevard and Tropicana Avenue. The aging resort is surrounded by the MGM Grand, Excalibur, Luxor, Monte Carlo and New York-New York mega-resorts.
In its most recent annual report, Aztar said it planned to raze the Tropicana, develop a billion-dollar resort on the north half of the site and sell the remainder into a joint venture. As tentatively envisioned, the north site would hold 2,725 hotel rooms and suites; 200,000 sf of dining, entertainment and retail facilities; a 100,000-sf casino; a 3,800-car parking garage; and a four-acre rooftop pool recreation deck overlooking the Strip.
Columbia Sussex is the largest licensee of full-service Marriott Hotels in the US. Columbia Sussex president William Yung has said Columbia Entertainment has no intention of tearing down the Tropicana any time soon, in part because it fills a key mid-market niche that is being eaten away by redevelopment. Yung has said the more likely scenario will be an addition to the property that may require partial demolition of one or two existing structures.
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