Trump dismisses offer from online casino firm

[clevfan]

October 08, 2004


Trump dismisses offer from online casino firm

PRESS OF ATLANTIC CITY
By DONALD WITTKOWSKI

Donald Trump's troubled casino company doesn't want to place its fortunes in the hands of an Internet gaming operator.

Trump Hotels & Casino Resorts Inc. is saying thanks, but no thanks to a surprise $400 million investment offer made last week by Casino Fortune, which bills itself as the world's oldest online gaming company.

"I'm not aware of who they are or what they are trying to do," Scott C. Butera, Trump Hotels executive vice president, said of Casino Fortune. "A far as we're concerned, we're not considering it."

Butera wasn't sure whether Casino Fortune's purported offer to buy a 31 percent stake in Trump Hotels was a legitimate business deal or an elaborate publicity stunt, although he said he suspected the latter.

Casino Fortune, based on the Caribbean island of Trinidad, made its offer following a failed attempt by Trump Hotels to secure a $400 million bailout from investment banking giant Credit Suisse First Boston's private equity fund, DLJ Merchant Banking Partners III.

Trump Hotels is looking for investment partners to help it restructure a $1.8 billion debt load that threatens its survival. Negotiations continue with bondholders to reduce the debt and free up desperately needed cash that would be used to rejuvenate the three outdated Trump casinos in Atlantic City.

"We're in intensive discussions on all fronts and things are moving along," Butera said of talks with bondholders. "I would say we're pursuing multiple paths."

One option under consideration is for Trump himself to take the company private. Trump Hotels has never turned a profit since going public in 1995. Bankruptcy has also been discussed, but Butera said the company wants to avoid it.

Despite its reservations about the Casino Fortune offer, Trump Hotels seems to have left a little wiggle room for further discussions on a possible deal.

"At this point, we're leaving it as is, but if we get more information we may change our view," Butera said.

Casino Fortune spokesman David M. Singer said Trump Hotels has requested a formal letter of intent that would be considered by the Trump board of directors.

Singer said Casino Fortune views Trump Hotels as an investment opportunity that would allow it to expand its gaming operations to the United States. In addition to its Internet gaming business, the company runs eight land-based casinos in the Caribbean, Europe and Africa.

Since Internet gambling is illegal in the United States, Casino Fortune would likely have difficulty winning regulatory approval for an Atlantic City casino license if it did invest in Trump Hotels. To overcome potential regulatory obstacles, Casino Fortune would separate its online gaming business from the proposed Atlantic City operations by having its parent company, the Sunny Group, do the deal with Trump, Singer explained.

"We would obviously segregate the companies," he said.

Company representatives insist the offer to buy a stake in Trump Hotels is perfectly legitimate. At the same time, they acknowledged that Casino Fortune's unorthodox style and its involvement in the tenuously regulated Internet gaming business could pose challenges.

"We want to have fun," Singer said. "The problem is, people don't always take us seriously and we don't go forward."

Last April, Casino Fortune made a reputed offer to buy a seat on the space shuttle to help NASA overcome its budgetary problems. Casino Fortune distributed a press release describing how it planned to award a shuttle ride to the winner of an online gaming tournament. NASA rejected the proposal.

"The joke is, we probably ruined it for everyone else because we went public and NASA backed off from it," said Kevin Mercuri, another Casino Fortune spokesman.

Casino Fortune also said it made a $380 million offer earlier this year to buy the Phoenix Suns of the NBA, but lost out to a $408 million bid from a group of investors.