High Rollers Heap Chips On Aztarby
The gambling world is abuzz with talk of deep-pocketed players such as Marvin Davis, Carl Icahn, Ron Perelman, and Sumner Redstone circling Las Vegas and Atlantic City looking at properties. Rumored to be a takeover target: Aztar (AZR), owner and operator of the Tropicana in Las Vegas and TropWorld in Atlantic City.
"This is the main reason [Bally Entertainment Chairman] Arthur Goldberg has been buying Aztar," says a Nevada money manager. He thinks Goldberg has accumulated a 4% stake. Most gaming stocks have been lackluster this year, but not Aztar: From 5 3/4 in January, it has risen to nearly 9 3/4.
Says Chuck DiRocco, editor of Gaming Today: "Where there's Goldberg, there's smoke." He recalls that Goldberg bought into Caesar's World months before it was acquired by ITT. DiRocco says Goldberg told him Aztar wasn't being run profitably--compared with Bally. Goldberg says he could do better.
Jason Adler of Smith Barney says the Tropicana will probably have a disappointing "breakeven or slightly negative cash flow" this year.
DiRocco thinks Goldberg will make a bid or else "stir the pot" for Perelman, Davis, or another player who may move in. He says Goldberg could either join in or sell his shares to the bidder. Goldberg sees Aztar as a win-win situation, says DiRocco. He adds that the Jaffe family of Chicago has a long-term lease on the land where Aztar sits. DiRocco suspects Goldberg has struck a deal with the Jaffes. A Bally spokesman declined to comment on the rumors and on DiRocco's remarks. An Aztar spokesman also declined comment.