Look, had the economy held to an even keel, the LBO was extremely rational. No doubt there were signs to give pause for concern, but I'm not going to question the strength of their particular crystal ball at the time. I find it quite likely that TPG/Apollo will be all smiles when everything comes out in the wash.
Where I have my qualms about a Palms acquisition is that CE has a lousy track record when it comes to managing brand equity. Harrah's heavily "generic-ized" Caesars Palace to the extent that much of what once made it an elite property evaporated.
Under Park Place, you felt the uniqueness of CP from the moment you stepped in the door. With Total Rewards, patrons in the check-in lines and on the gaming floor were largely indistinguishable from those over at Bally's.
It's laughable, that only after trashing CP, Harrah's decided the "Caesars" brand was appealing enough to change monikers.
I imagine that in going after Palms, the intent would be to give current management a free hand. But I think Caesars (nee Harrah's) is too ingrained in it's franchising practices to actually do that, and I look for the Palms identity to suffer just as was the case with CP.
Unfortunately, the Palms brand equity is a much stronger factor in the success of the property and the consequence of it's dilution is likely to be pretty dismal.
--- In vpFREE@yahoogroups.com, David Silvus <djsilvus@...> wrote:
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> I've wondered that very thing. For companies built upon gaming, they sure seem to engage in the same rationalization they hope their customers make: you can't make any REAL money unless you risk REAL money, who cares if you really have it to lose or not.
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> What's a few more zero place holders on the bankruptcy filing?
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> To: vpFREE@yahoogroups.com
> From: gleng4444@...
> Date: Wed, 19 Jan 2011 17:06:27 +0000
> Subject: [vpFREE] Re: Is the Palms going to be taken over by Caesars Entertainment Corp.?
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> Way back when Steve Wynn and Donald Trump were competing for rights to build what ultimately became the Borgata in AC, Wynn reportedly said, "No one with a negative net worth (meaning "The Donald")should get a license to own a casino."
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> Modern private-equity financing methods have largely mooted that point about owner solvency, but I do wonder if a company that can't even afford to finish its new Caesars Palace tower should try to add more Vegas casino properties in the current economic environment.
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> The GMan
> >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
> --- In vpFREE@yahoogroups.com, "cb_ray" <cb_ray@> wrote:
> > Last night at Harrah's I was talking with someone with Caesars Entertainment Corp. about the rumor that *****Caesars can take them over like they did with PH."
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> [Non-text portions of this message have been removed]
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