Icahn Continues Bankruptcy Gamble By Bidding On Fontainebleau

Carl Icahn has built an empire by seeking out good deals in bankruptcy court, turning things around, and re-selling the business at a high price than he bought it. That is why it comes as no surprise that Icahn has put in a bid for the Fontainebleau project in Las Vegas.

The Fontainebleau resort is around seventy percent complete, but the owners have fallen on difficult financial times, and it has left the project in bankruptcy court. Icahn put his bid of $145 million in, and it is higher than Penn National' bid.

Penn National has shown interest in the Fontainebleau project and had placed a bid of just over $100 million. They upped that bid to $145 million, but now believe that the price has reached a point where they can no longer bid.

Icahn's bid, meanwhile, will serve as a "stalking horse" bid. That is basically a starting bid, and one that could be topped by another bidder. If nobody else bids, Icahn would win the rights to the resort project.

That most likely will not be the case with the Fontainebleau. It has been reported that over forty interested parties have already looked into the project. Although it is seventy percent complete, there still will likely be another $1.5 billion in construction costs to finish the project.

The date of the auction is expected to be just after the new year. That gives companies time to assess the situation and decide whether or not the Fontainebleau would be a good investment.

November 24, 2009
Posted By Terry Goodwin
Staff Editor, CasinoGamblingWeb.com
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