Update on Cordish Bid for Trop
The conservator of the Tropicana Atlantic City Casino & Resort issued the following press release today regarding the sale of the Tropicana:
“TROPICANA CONSERVATOR PROVIDES UPDATE ON CORDISH PROPOSAL TO ACQUIRE CASINO AND RESORT
ATLANTIC CITY, NJ, September 29, 2008 – In response to inquiries from the media, Justice Gary S. Stein, the state-appointed trustee and conservator of the Tropicana Atlantic City Casino and Resort (the “Tropicana”), today released additional details concerning the proposal received from The Cordish Company (“Cordish”) concerning its proposal to purchase the Tropicana.
Proposals to purchase the Tropicana were due on September 15, 2008, and Cordish submitted its bid on that date, in accordance with the procedures set forth by the conservator and his investment banker, Moelis & Company. The Cordish bid provided two alternatives. One of the alternatives involved $700 million in cash and seller financing as follows: (i) $450 million in cash to the seller; and (ii) $250 million in subordinated notes issued to the seller by the buyer with a ten year maturity and a 10% coupon, payable-in-kind at the buyer’s option. The other alternative was an all-cash purchase for $575 million. In addition, Cordish informed Justice Stein that both alternatives contemplate an additional $100 million in capital expenditures that would be invested in the property subsequent to closing by the buyer.
After conducting a thorough auction process, Justice Stein and his investment banker selected the Cordish bid for a number of reasons, including the price and consideration offered, as well as Cordish’s capabilities and track record of success in gaming, real estate development, and management. Cordish has indicated to Justice Stein that it is prepared to complete its due diligence and move forward expeditiously. The transaction is subject to completion of a definitive asset purchase agreement (which is in process), approval of the New Jersey Casino Control Commission, and various other conditions.
The Cordish Company is one of the largest real estate developers in the world with extensive expertise in gaming and lodging, entertainment and mixed-use projects, sports anchored developments, and retail, office and residential construction. Many of Cordish’s developments involve public/private partnerships, including The Walk in Atlantic City.
The Tropicana is one of the largest casino hotels in Atlantic City with 2,129 rooms and almost 140,000 square feet of gaming space. The complex is situated on approximately 14 acres of land with 220 yards of ocean frontage.”
