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Arnold M. Knightly

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Boyd withdraws several Station objections

27 Apr 2010

By Arnold M. Knightly
LAS VEGAS, Nevada -- Boyd Gaming Corp. withdrew several of its objections in Station Casinos' bankruptcy late Monday, but the company said it remains committed to acquiring all or part of its locals gaming rival.

In a filing with the U.S. Bankruptcy Court in Reno, Boyd Gaming said it would focus on one aspect of Station Casinos' reorganization plan, a move to sell a large chunk of the company, including Texas Station, Santa Fe Station and the Fiesta properties, through a bankruptcy court auction. Last week, members of Station Casinos founding family said they would pursue a $772 million stalking-horse bid through the newly formed Fertitta Gaming for those assets.

Under the reorganization plan, Station Casinos would spin off five of its largest resorts, including Red Rock Resort and Sunset Station, into a separate holding company owned by its lenders, Los Angeles real estate company Colony Capital and Fertitta Gaming.

"Following hearings before the bankruptcy court on Monday, Boyd Gaming has withdrawn its objections to Station's master lease compromise agreement and exclusivity extension motions," company spokesman Rob Meyne said in a statement. "We have decided to focus our efforts on the key objections related to the proposed bidding procedures for Station's … assets."

Meyne said the official committee of unsecured creditors and the independent lenders have already objected to the master lease compromise agreement and exclusivity extension motion. Those objections to those motions will be the subject of hearing next Tuesday in Reno.

"We respect the fact that the court has a limited amount of time to consider a wide range of matters, and it has become clear, based on the responsive papers filed by Station, that Station is determined to use a portion of that limited time to attack Boyd Gaming, rather than address the important issues at hand," Meyne said.

Boyd Gaming has made two separate offers to acquire all or a portion of Station Casinos in the past year.

Under the Station Casinos reorganization plans, the five resorts -- Red Rock Resort, Sunset Station, Boulder Station, Palace Station and Wild Wild West -- would become its own company that lenders Deutsche Bank and JP Morgan would own and sell a 46 percent stake to Fertitta Gaming for $85.6 million.

Fertitta Gaming would operate the casinos under long-term management contracts that would pay the company 2 percent of the properties' revenues and 5 percent of their cash flow.

The stalking horse bid would be in partnership with Colony Capital and the banks. The deal calls for $317 million in cash and $455 million in new credit, but it doesn't elaborate on how much money each party would commit.

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