MGM Mirage, Hilton Hotels in Talks to Acquire Cosmopolitan Casino
MGM Mirage and Hilton Hotels Corporation may be vying to take advantage of developer Ian Bruce Eichner's financial troubles and take over the foreclosed Cosmopolitan casino project.
Deutsche Bank announced this week it would foreclose on the Las Vegas Strip luxury casino complex, after Eichner defaulted in January on a $760 million loan, and has been unable to obtain alternate financing.
.The bank has been reluctant to take over the project, which was slated to open in late 2009. Even seasoned casino operators are struggling to maintain business in the current economic environment, and the bank's directors prefer to stay in the banking business rather than run a destination resort.
Thus, the bank has contacted companies to either buy out the project, or perhaps enter into a partnership running the casino. MGM and Hilton are both prominent among the interested parties, although MGM already has significant exposure in its CityCenter construction, one of several multi-billion dollar investments begun on the Strip at the most inappropriate of financial times.
Another such development, Boyd Gaming's Echelon, was suspended while under construction by the company; investors hailed the move as showing common sense and fiscal restraint, and Boyd stock jumped.
It is unclear how investors and analysts might react to MGM further extending itself, unless such a favorable deal might be struck with Deutsche Bank that the level of risk might be minimized. Considering the bank's position, between the rock of the economy and the hard place of the Strip, such a deal may be negotiable.
The Cosmopolitan is planned to host two high-rise towers, a sandy beach and pool overlooking the Strip, and three wedding chapels. The name has also brought problems, as Cosmo magazine has sued to prevent any misconception concerning their involvement.
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|Posted by: Ware||When: 08/10/2008 08:57:06 AM EST|
|The Cosmopolitian location is excellent and very logical for MGM to own considering they would own the entire block between Flamingo and Trop. It doesn't seem possible that MGM would allow Hilton to occupy and market their block.|
|Posted by: citizen_ken||When: 08/10/2008 02:16:04 PM EST|
|Agreed with above post somewhat but I wouldn't be surprise if both joins venture to take over the Cosmopolitan. MGM has the experience to run the Casino and Hilton manages the hotel operation.|