Penn National may hold off on Strip deal until 2010
Executives from Penn National Gaming may be eyeing a slew of Las Vegas casinos for a potential purchase. But don’t expect a deal this year.
JP Morgan gaming analyst Joe Greff spent time recently with Penn’s leadership at the regional casino operator’s headquarters in Wyomissing, Pa., including chairman Peter Carlino, chief financial officer Bill Clifford and president Tim Wilmott.
Penn has made no secret of its interest in buying a Strip casino, utilizing some of the $1.5 billion in cash the company has available. It was rumored to be looking at properties owned by MGM Mirage and Harrah’s Entertainment, both of which are in various stages of digging themselves out of mountains of multi-billion dollar long-term debt.
Greff said Penn might be targeting other Las Vegas assets, including the under construction and financially troubled Cosmopolitan, all or portions of Station Casinos and Planet Hollywood.
“Regarding possibilities, the company appeared to express preference towards assets which would not likely remain in the hands of their current or projected owners,” Greff told investors.
He said MGM Mirage and Harrah’s is asking too high a price for its Las Vegas resorts. Greff said Penn might wait until 2010 to pull the trigger.
“We do not believe Penn is any closer to an acquisition at this stage and it appears as though management has soured on Atlantic City,” Greff said.
Penn National has surfaced in other markets. The company is bidding on the bankrupt Greektown Casino in Detroit, currently managed by the Las Vegas-based Fine Point Management Group, and a potential video lottery terminal casino at the Aqueduct racetrack near New York City.