Marina Alantic City deal fails; Carl Icahn in at Tropicana

Jun 9, 2009 5:10 PM
by Ray Poirier | There are not many buyers out there for Atlantic City casinos unless you’re able to pull a coup like the cagey billionaire investor Carl Icahn.

When the auction process began for the Tropicana Resort Hotel property that was ordered sold by state gaming regulators, Icahn’s investment group submitted a "stalking horse" bid of $200 million

There were no higher bidders.

Next came the sale of Trump Marina Hotel & Casino to Coastal Marina LLC. But the deal has fallen through. Trump Entertainment Resorts (TRMP) says it still plans to sell the property if it can find a buyer.

The company charged that "Coastal has failed to consummate the transaction within the time provided under the agreement," thus causing the deal to fail. But Coastal said Trump entities breached the purchase agreement and "fraudulently induced" Coastal to enter into it.

The original deal, made when Atlantic City casinos were in better shape than they have been in recent months, called for Coastal to pay $316 million for Trump Marina. Later, Coastal lowered its bid to $270 million.

Mark Juliano, Trump CEO, was quoted as saying, "A couple of things could happen. Perhaps we get back to the table with Coastal at a different price in a period when the credit markets get a little bit better." Or, he added, the company could get together with people "we have spoken to before that are qualified buyers."

As for Icahn and his investment group, it is possible that the purchase of the Trop could be approved by a bankruptcy judge this week.

Icahn's group holds a $1.4 billion mortgage on the Tropicana. That enabled them to craft their offer in a way that competitors were unable to match, said officials.

When the Tropicana was ordered sold and a conservator was appointed to seek a buyer, it was felt that the property could bring as much as $1 billion. But, obviously, times have changed.