Carl Icahn Sells his Unfinished Casino in Las Vegas for $600M
In the latest development, a casino owner in Las Vegas strike gold in gold by selling his unfinished casino for a whopping amount. Carl Icahn, the owner of Atlantic City casino, sold his Fontainebleau, an unfinished casino, per the information provided by his holding on last week of August 2017.
Interestingly, Icahn Enterprises handed over the casino located in Las Vegas Strip for an amount of $600 million to two investment firms named New Valley LLC and The Witkoff Group LLC. Icahn Enterprises was holding the property since it acquired through a bankruptcy of $148 million in the year 2010.
Icahn confirmed that he is delighted to announce the sale of the unfinished casino that was considered as a hidden gem of Icahn Enterprise. He further added that he purchased the property when nobody was interested in investing. Icahn continued that his company has profited more than $450 million from the sale.
Interestingly, both the buyers, New Valley and Witkoff, are also reportedly happy with the deal, and they responded the property as a highly undervalued hotel. The buyers confirmed that they purchased the hotel with a substantial discount to its replacement. This means that the deal is a highly lucrative one considering the current estimate for constructing such as resort hotel and casino in Las Vegas.
It should be noted that the Fontainebleau project was commenced in the year 2005 and construction started in February 2017. But, the 2008 recession made a big hit to the entire project due to sluggish market conditions and falling gambling revenues in Las Vegas. Subsequently, the construction halted in the year 2009. It is estimated that $1.2 billion is needed to complete the project.
Icahn added that the highly profitable investment was the strategy of the Icahn Enterprises to invest in undervalued businesses and assets. It follows a modus operandi of nurturing, guiding, and improving the condition, business, and operations. Finally, selling it for a huge margin by potentially leveraging from the changing market conditions and mood.
Fontainebleau situated on the site that was previously occupied by the Algiers Hotel and El Rancho Hotel and Casino. The buyers have confirmed that the casino hotel would be renamed after completion. However, they did not announce the plans to finish the project yet, and it is expected in the coming days.
It is already identified that 2755 Las Vegas South became one of the primary locations for physical assets not only in Nevada but the country as well. Steve Witkoff, the Chief Executive and Chairman of Witkoff, confirmed that the factor of prime location attracted his firm to invest in the property. He added that the resort is perfectly located in Las Vegas Strip, with a direct access from the prestigious Las Vegas Convention Center.
Icahn Enterprises is a New York-based firm with varied investment options and interests in multiple industries including gaming, energy, automotive, railcar, metals, food packaging, mining, home fashion, real estate, and more. The firm was founded in the year 1987, and it has multiple subsidiaries to handle its diverse business.