It’s the day of The Palms rumors.
This one’s more a rumor from a different anonymous source, but reliable.
On May 9, The Palms is expected to shift control of operations to Leonard Green & Partners LP.
The private equity firm, which holds $9 billion in equity capital under management, is in a buying frenzy lately, making news last Friday about wanting to purchase BJ’s Wholesale Club for $3 billion.
This fits with their past purchases of wholesale club warehouses, such as The Container Store, Big 5 Sporting Goods, and Sports Authority.
Recently, though, Leonard Green has been into acquiring the debt of Las Vegas casinos, which is big business being able to pick up casinos for cheap (such as private equity firm Texas Pacific Group Capital, which owns Caesars Entertainment and took over Planet Hollywood in February 2010). Last October, they bid on M Resort, though lost to Penn National.
And now The Palms.
Last year with TPG, Leonard Green acquired $125 million of an almost $400 million loan backed by The Palms, which elected not to refinance last October.
The Palms is currently in debt restructuring, and our source says that it occurred, with Leonard Green and TPG now having a controlling stake.
This means that, like Planet Hollywood, The Palms would be operated by Caesars and soon be part of the Total Rewards program.
We suspect owner George Maloof will be kept on as operator, but the family could also end up taking the money and going to something else.
Most certainly, the management team would be replaced. And the better paying slots and video poker machines, compared to those at Caesars properties? Sorry, better play them now while you can.
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