Boyd Gaming Corp. abandoned its bid for some assets of Station Casinos Inc., the biggest U.S. gambling company in bankruptcy, citing concerns with the court-approved auction conditions.
“We have concluded this opportunity no longer makes sense for our company,” Chief Executive Officer Keith Smith said today in a statement. He cited “bidding procedures that favor Station insiders” and the properties’ limited potential as reasons.
Boyd was the biggest known rival to efforts by Station’s existing owners to retain control of all of its casinos after bankruptcy. Today was the deadline for bidders to submit their offers before a Nevada judge oversees an Aug. 6 auction of most of Station’s casinos. The owners, the founding Fertitta family and Colony Capital LLC, are opening bidding with $772 million of new equity.
Five other casinos, the company’s most profitable, would be taken over by the same owners and their banks without an auction in exchange for a cash payment and the cancellation of some debt.
Boyd said it objected to bid requirements including paying for leased land, and allowing the existing owners’ to retain information technology and customer lists, and “hire away any or all employees and executives.”
Boyd Gaming “will only pursue transactions that are financially sound, fit well with our existing business, and offer attractive long-term returns for our shareholders,” Smith said. “Clearly, this opportunity no longer meets these criteria.”
Boyd had pursued Station since February 2009, making a preliminary bid weeks after the Las Vegas-based casino company proposed filing for bankruptcy in collaboration with its lenders. Talks with other creditors failed and Station ultimately filed for Chapter 11 protection last July, overwhelmed by debt added when it was taken private by Fertitta management and Colony Capital in November 2007 for $8.5 billion.
Boyd in December offered $2.45 billion in cash and assumed debt for all of Station Casinos, and was rebuffed in favor of the court process.
The case is In re Station Casinos Inc., 09-52477, U.S. Bankruptcy Court, District of Nevada (Reno).