Colony Capital LLC, a Los Angeles-based equity firm that has long been eyeing the Aladdin hotel-casino, is expected to make a bid for the Las Vegas Strip property in the next few weeks, sources familiar with the deal said.
Attorneys involved in the Aladdin's bankruptcy proceedings, some of them citing a court order prohibiting them from talking about the deal, declined comment.
Representatives of the Aladdin, Colony Capital and attorneys representing creditors of the bankrupt hotel-casino also would not comment on the expected bid.
Colony Capital, which acquired the Resorts International in Atlantic City for $140 million and sold its holdings in Harveys to Harrah's Entertainment Inc. for $675 million in deals announced last year, would offer a "stalking horse" bid.
The strategy, described by analysts as a possibility for the Aladdin earlier this year, would enable Colony to receive a walk-away fee if another bidder came forward with a better offer.
That means others who have been investigating the feasibility of making a bid could still be in the running if they outbid Colony.
Gaming analyst Marc Falcone of Deutsche Banc said Colony representatives were on the Aladdin property recently and that he expects them to make a bid, but he added that other potential bidders are still examining the property's books before considering an offer.
The Daily Deal, which operates TheDeal.com, a financial news Internet site, reported through unidentified sources that Colony's offer already has been approved by the Aladdin's board of directors and its secured creditors.
Representatives of the Aladdin, Colony and creditors would not comment on the published report.
The amount of Colony's bid has not been disclosed, but the company, which has been interested in the property for months, had been speculated earlier at offering a price ranging from $375 million to $500 million. The hotel-casino has an estimated $437.5 million in bank debt.
Several companies have been named as potential bidders on the Aladdin.
The most prominent, after Colony Capital, has been Glendale, Calif.-based Pinnacle Entertainment Inc., formerly Hollywood Park, which owns seven casinos in four U.S. states and Argentina and also receives lease money from two card clubs in California.
The Daily Deal's report said an unidentified casino industry source said Pinnacle would bid on the Aladdin. Pinnacle officials could not be reached for comment.
Another company named in the past as potentially interested in the Aladdin is Park Place Entertainment Corp., which holds about one-third of the company's high-yield bonds and whose Paris Las Vegas hotel-casino is adjacent to the Aladdin.
Park Place, however, has said the creditors are asking more than Park Place would consider paying for the property.
The media have speculated on other prospective bidders, none of whom have confirmed an interest in making an offer. They include Stratosphere hotel-casino owner Carl Icahn, MGM MIRAGE, Harrah's Entertainment Inc., and two international suitors, Macau gaming tycoon Stanley Ho and South African casino mogul Sol Kerzner.
Meanwhile, the Aladdin has filed a monthly operating report with the U.S. Bankruptcy Court in Las Vegas showing a slight loss for the month of August.
The report says the hotel-casino lost $683,851, which includes $566,083 in bankruptcy fees.
For the month, the property reported revenues of $20.6 million and expenses of $20.7 million.
The company, whose bankruptcy filing will be a year old on Saturday, has lost $220.7 million since the filing. When the filing occurred, the company reported assets of $698.2 million and liabilities of $593.5 million.
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