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Morgans Closes Hard Rock Casino Deal
Message was posted: 11:00 Feb 6th, 2007

User: vegasqueen Rank: Casino Gold: 28510CG Contributor rating: 71920 Status: Offline

Casino news source: Houston Chronicle - http://www.chron.com/ Morgans Closes Hard Rock Casino Deal LAS VEGAS — Morgans Hotel Group Co. said Monday it completed its $770 million purchase of the Hard Rock Hotel & Casino in Las Vegas from founder Peter Morton. Morgans said it funded one-third of the equity portion of the deal, or $57.5 million, while equity partner DLJ Merchant Banking Partners, paid two-thirds, or $115 million. The remainder was paid for by mortgage financing, it said. Closing the deal "removes the overhang on the shares" of Morgans since the deal was announced in May 2006, CIBC World Markets analyst David Katz said in a research note. DLJ committed up to $150 million in equity to expand the property, while banks have committed up to $600 million. The deal is separate from the Seminole Tribe of Florida's $965 million purchase of Hard Rock casinos, restaurants, hotels and memorabilia from London-based Rank Group PLC, which was announced in December. Morton, co-founder of the Hard Rock brand in 1971, sold that part of the business to Rank in 1996 for $410 million. Morgans Chief Executive Ed Scheetz said the group looked forward "to taking the iconic Hard Rock property to a new level of sophistication." Golden Gaming Inc., which operates PT's taverns and restaurants in Las Vegas and three casinos in Black Hawk, Colo., will run the casino. Morgans will handle all other aspects of the business. Scheetz has said the Hard Rock's 647-room hotel and 30,000 square-foot casino on 41 acres about a mile east of the Strip would help the company's entry into the market. In January 2006, Morgans announced it would partner with Boyd Gaming Corp. to build two boutique hotels with 1,600 rooms on Boyd's $4 billion casino complex on the Strip. Echelon Place is scheduled to open in 2010. Morgan shares rose 9 cents to $18.21 in afternoon trading on the Nasdaq. Boyd Gaming added 78 cents at $47.57 on the New York Stock Exchange.