A New Act From Vegasby
Las Vegas Entertainment Network is gambling on a casino-hotel, and some investors are betting with the company. Shares of LVEN have been tracking up, from 2 1/2 a share in late January to 3 1/2 on Apr. 21. For a small, little-known Las Vegas company that's still very much in the red, that's a stupendous feat. What's going on?
A producer of Las Vegas-type television shows for TV networks overseas, LVEN will take quite a while to make a splash in the entertainment business. However, the likes of Liza Minnelli and Tina Turner performed in the company's first Las Vegas Tonight magazine-style program that aired last New Year's eve on France's prestigious France 3 channel. And other stars are expected to appear in upcoming shows, says the company.
But what's firing up LVEN's stock of late is the company's impending purchase of Maxim Hotel & Casino, a 795-room Las Vegas hotel with a 20,000 square-foot gambling casino. It produced revenues of some $60 million last year, estimates Byron Lasky, LVEN co-chairman. Subject to approval by the Nevada Gaming Assn., the deal is expected to be completed in the next several weeks, says George Carhart, chairman of Westfield Financial in New York, which makes a market in the stock. LEVN is buying Maxim from Jack Anderson, a Las Vegas entrepreneur, in a deal worth $45 million in stock and cash, says Carhart.
The hotel-casino, he adds, will make LEVN profitable overnight. Maxim is expected to post revenues of $70 million this year and pretax earnings of $8 million to $9 million. "If the deal fails to go through, watch out," warns one investor. But if it succeeds, he says, "the stock will hit the jackpot."