By Jeff Burbank
With a stalking horse now out of the gate, Aladdin Gaming LLC is hoping that more bidders will appear and surpass the $600 million a joint venture including Planet Hollywood’s Robert Earl and the Starwood hotel company offered for the troubled Aladdin casino hotel last week.
But new ownership for the Strip megaresort, which filed for bankruptcy protection 17 months ago only a year after it opened, might be months away and could even extend into 2004.
"We’re far from a done deal, but it’s a very good start for us," said Tyri Squyres, director of public relations for Aladdin Gaming.
Earl, Starwood Hotels and Resorts Worldwide, Inc., and Bay Harbour Management LC said they would assume $510 million in Aladdin Gaming’s debt, pump in $90 million for improvements, rename the hotel the "Planet Hollywood Hotel & Casino" and add it to Starwood’s Sheraton hotel chain. Starwood also wants to build up to 600 timeshare units there.
The deal, in which Earl would exhibit some of his movie and TV memorabilia in the hotel, would not include the 500,000-square foot Desert Passage mall.
The mall is attached to the hotel and has been suffering from poor business almost since the Aladdin property opened in September 2000, at a total cost of $1.4 billion.
But it could be two months or more before U.S. Bankruptcy Court Judge Clive Jones sets a hearing to consider the $600 million bid and any other bids for the 2,567-room hotel property. If no one else makes an offer, the Planet Hollywood/Starwood group ”” who are not licensed for gaming — would have to endure an investigation by the Gaming Control Board, which might not be completed before 2004.
Squyres, however, said that the sale of the Aladdin could move more quickly if the judge chose a licensed bidder over the joint venture. She described such a bidder as "a known Las Vegas gaming entity with more money and a better management team."
"This bid will go before the judge, for 45 or 60 days or more, or whatever the judge determines," Squyres said. "Once (the judge) acknowledges the stalking horse bidder, then it’s opened up to all bids. Another bidder might make a better offer. The judge selects the bid and confirms the new owner."
"But, it’s all contingent on obtaining a gaming license, and the bidder can’t make the investment until then. So, it’s very lengthy."
The Aladdin is trying to box itself out of the corner the casino has been in since it started Chapter 11 bankruptcy proceedings on Sept. 28, 2001. The filing was little more than a couple of weeks after the 9-11 terrorist attacks sparked cutbacks in air travel to Las Vegas.