Fertitta Brothers Said to Weigh IPO for Station Casinos

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Station Casinos LLC, the Las Vegas-based casino company controlled by brothers Frank and Lorenzo Fertitta, is looking to sell shares to the public four years after leaving bankruptcy, people with knowledge of the matter said.

The company, which owns or manages 21 casinos, has asked investment banks for proposals for an initial public offering that would take place this year, said the people, who asked not to be identified because the matter is confidential.

An IPO would give the Fertittas, who almost lost control of the company after its 2009 bankruptcy, a way to recoup some of the $238 million they put back into Station Casinos in its restructuring. A plan announced in March to make a special distribution to investors wasn’t completed, one of the people said.

Lori Nelson, a spokeswoman for Station Casinos, declined to comment.

Station Casinos could be valued at more than $3.5 billion, including $2.15 billion in debt, one of the people said.

The company is considering a return to the public market as smaller casinos that cater to local gamblers enjoy a business uptick following years of weak performance. Most of the company’s properties are in suburban Las Vegas.

First-quarter revenue rose 5 percent to $342.8 million from a year earlier, according to a company release. Earnings before interest, taxes, depreciation and amortization increased 12 percent to $124.6 million.

Station Casinos filed for Chapter 11 bankruptcy protection in July 2009, two years after an $8.7 billion leveraged buyout, including debt, by the Fertitta family and Colony Capital. The company emerged in July 2011, led by the Fertittas, who own 58 percent of the restructured company, with Deutsche Bank AG and other lenders owning the balance.

The company was founded by the Fertittas’ father, Frank Fertitta Jr., who worked his way up from card dealer to general manager of the Fremont Hotel & Casino, according to his obituary in the Las Vegas Review-Journal. His first property, now called Palace Station, opened in 1976 and was aimed at the “locals” market.

The Fertitta brothers expanded the business, opening up resorts, such as the Red Rock Casino Resort & Spa, that feature bowling alleys and movie theaters. The brothers separately own the Ultimate Fighting Championship, the mixed martial arts league.

(Adds previous special dividend plan in third paragraph.)
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