HotelChatter

Rumors Remain Rumors

One local paper says there are rumors the parent corporation of the Tropicana is seeking buyers, while another local paper reported that the president of the resorts division at Tropicana said the company is not for sale.

On September 19, 2004, the local paper, Review-Journal, reported that Wall Street sources are saying Aztar Corp. Chairman Paul Rubeli is seriously marketing his company to active suitors. They say the the company's biggest asset is the real estate on which its Tropicana hotel-casino sits in Las Vegas. Sources say a deal would make sense if it positioned Aztar with another Midwest operator. They also say the most likely deal would be done with a private equity fund that could use multiple investments to combine two or more midtier gaming companies. One analyst, however, said there have been sale rumors about Aztar since he was in eighth grade -- presumably several decades ago. Aztar declined to comment

On August 25, 2004, another local paper, the Las Vegas Sun reported:

That Dennis Gomes, president of the resorts division at Tropicana said of the proposed mega mergers between MGM/Mirage and Mandalay Bay and Harrah's and Caesars:  "I've seen some of these large companies, and I know our decision-making will be made a lot faster," said Gomes. "I don't think the mergers make us any more or less valuable because our value is determined by our productivity in terms of profits. But we'll have more flexibility than these gigantic bureaucracies."

Gomes acknowledged that there will be some disadvantages to competing against larger competitors.

"It puts us at a disadvantage when it comes to making deals with suppliers, like slot (machine) manufacturers," Gomes said. "They're (big competitors) going to have more clout, particularly in Atlantic City. But I think customers prefer the treatment they get with a smaller company. In the big places, it's harder to maintain that personal touch."

Gomes said the Tropicana's parent company, Phoenix-based Aztar Corp., has kept its Las Vegas plans a tightly guarded secret.

"Paul Rubeli (Aztar's chairman and chief executive) has always maintained that the Tropicana is not for sale. It's too valuable," Gomes said. "There have been a lot of development plans being studied and it's very exciting, but a final decision on what we're doing isn't there yet."