DONT BELIEVE IT! Rumors continue to circulate that Aladdin Gaming will soon go on the block.
"Dont believe it," said a tuned-in pipe.
"London Club International (LCI) wont let it happen. The well-established British casino has come up with $195 million and isnt about to let the Aladdin and its prized Strip location slide through their fingers.
"Nibble on these facts and come to your own conclusion," the pipe continued.
- "The October numbers at the Aladdin were gangbusters. The London Club is doing exceptionally well. LCI upped its 25% stake in Aladdin Gaming to 40% by investing an additional $30 million.
- "At the same time, LCI is sitting pretty with ownership of preferred shares. How pretty? High compound returns up to 80%.
- "The dilution effect is creating new rumors. LCI is going to take out the Sommer Trust, which owns 57% of the company."
More pipe: "The high preferred shares yield may be giving that impression. And, if the day ever comes to take out the Sommer Family, the high compound returns will be the sugar that makes the medicine go down easily.
"If you ever thought of investing in the London stock market, LCI is worth looking at. Its selling in the $114 range, with a 52-week high/low of $158/$98.
"The shares could be a bargain price if you believe in location, location, location.
"I do," said the pipe. The negativity focuses on the casino opening in late summer when Las Vegas business has not yet made the strong run that it enjoys.
PINNACLE BOMBING? "Dont count on the Pinnacle Entertainment Inc. (PNK) merger with Colony Capital to go forward," reported our Wall Street pipe.
Whats the problem?
"Money isnt that always the problem? Reports were hearing here are that Colony Capital is trying to borrow $675 million to complete the purchase of Pinnacle and, as you probably are aware, money is hard to come by right now," he said.
Pinnacle Entertainment agreed to be bought for $24 a share in the spring. Officers of the company convened a stockholders meeting Oct. 10 when the deal was approved by 78% of the shareholders.
"Like so many of these deals," explained the Wall Streeter, "they rely almost completely on borrowed money. And frankly, if the acquirer doesnt have very deep pockets, many of these projects just wont fly."
The slumping price of PNKs stock might be indicating the problem the merger is having. Although Colony Capital said it would pay $24 a share for PNK, the PNK stock was selling Monday at 175/16, down 15/16 for the day.
AUSTRALIANS FLIPFLOP ON INTERNET GAMBLING! Open season on Internet gambling looked like a slam-dunk in Australia, but that may not be the case after all. Australian Prime Minister John Howard has been able to improve the support he sought for a six-month moratorium on Internet gambling.
Internet casino operators are up in arms. The moratorium will not include horse racing or sport betting. Both forms of wagering will continue.
There are 15 online gambling operations licensed by the various states, but some may have to shut down. If the moratorium is implemented, a half-dozen sites that have started their casino gambling operations in the past six months will have to close down.
How profitable has the online gambling business been? CentreBet, one of the largest, claims it did about $120 million in Australian money during the past year, most of it coming from overseas gamblers.
KILROY WAS THERE! Gene Kilroy, a longtime friend and adviser to Muhammad Ali, called with early predictions for the Academy Awards to be given in 2002.
"I know its a long way off," Kilroy said. "The film hasnt even been made yet. Its going to be about the life of Ali, with Will Smith in the starring role. And Ive had a sneak preview with director Michael Mann and what he has up his sleeve. I also know actor Michael Benn. I knew him when he was a prizefighter. He will play the role of Sonny Liston in the movie.
"The budget for the flick is $105 million. Since I grew up in the Ali-Liston garden, Im convinced that not only will the movie receive Best Picture, but also that Mann will get the nod for Best Director and Smith will take Best Actor.
"Tell me I dont know what Im talking about, but make sure you bet on all three picks."
ICAHN STILL BUYING? An in-the-knowster was on the phone to give some heads-up on Carl Icahns latest purchase plans.
"Its a large shopping center adjacent to Arizona Charlies West and the parking lot there neither of which were included in his original purchase from the Becker family, former owners of the casino.
"On the east side of town (Arizona Charlies East), Icahn has plans to enlarge the bingo room and add 240 slots for a total of 1,056 machines at the property.
"As you already reported, the billionaire investor is finishing off a 1,000-room tower at the Stratosphere, Icahns third property in the Valley of Dollars."
The in-the-knowster left us with a final thought: "I think Carl likes it out here!"
STRICTLY TAX PURPOSES? Someone (Sumner Redstone, Microsoft Corp./MSFT or another large investor?) sold 1,219,000 shares of Midway Games (MWY) on Oct. 31. And 31 days later bought back the same amount. With Sumner Redstone and Microsoft rumored to be ready to move in, the gossip began.
I talked to a rosebud who really knows her business in such affairs.
"Rosebud: "The transaction was strictly for tax purposes. Im not sure by whom. However, Im still convinced that the company is in play. Their home video division could be hotter than a firecracker in the very near future with the companys new systems. The price is right (It closed Monday at 8.69; 52 week high, 247/16; 52-week low, 61/16), but maybe not the timing."
Leo Rishty, wise to the ways of Midway, told us that he rates MWY a strong buy with a 12-month target of $18-20 a share.
A bit optimistic? Perhaps so. But now at $8.69 a share, it may be worth a second look.
MORE GONDOLA ACCESS! Clark County Planning Commissioners met to hear arguments from The Venetian Hotel/Casino to allow access to the gondola ride from outside the hotel. Venetian owner, Sheldon Adelson, who took plenty of barbs getting the resort up and running, appears to have had the last laugh.