Icahn makes winning bid for bankrupt Fontainebleau

NEW YORK Wed Jan 20, 2010 2:41pm EST

Investor Carl Icahn speaks at the Wall Street Journal Deals & Deal Makers conference, held at the New York Stock Exchange, June 27, 2007. REUTERS/Chip East

Investor Carl Icahn speaks at the Wall Street Journal Deals & Deal Makers conference, held at the New York Stock Exchange, June 27, 2007.

Credit: Reuters/Chip East

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NEW YORK (Reuters) - Billionaire investor Carl Icahn has made the winning bid to purchase the bankrupt, unfinished Fontainebleau Las Vegas Resort in a bet that the struggling Las Vegas Strip will eventually turn around.

According to a court document filed late on Tuesday, the examiner tasked with running a court-supervised auction of the Fontainebleau said the only qualified bid received for the company was from Icahn Nevada Gaming Acquisition LLC.

Icahn offered $156.5 million to buy the casino in November, topping a previous offer from Penn National Gaming Inc (PENN.O), which dropped out of the bidding.

According to the examiner, two other submissions were made by the bid deadline but did not meet qualifications to close the sale, so Icahn's bid was declared the winner.

"My philosophy has always been to buy things when nobody wants them," Icahn said in an interview with Reuters.

"There's no question Vegas is pretty stormy right now, but if you buy things when nobody wants them, you just buy them and hope the sun will come out."

The Fontainebleau filed for bankruptcy protection in June after lenders cut off access to nearly $800 million of construction funds.

The 3,800-room casino resort, toward the northern end of the Las Vegas Strip, has already cost $2 billion.

Icahn said he is "looking" at plans to complete the stalled construction on Fontainebleau.

"We haven't made any decisions yet," he said. "I know it will be challenging for a while."

Icahn has been an active player in the distressed gaming sector in the past year as several casinos have been forced into bankruptcy by a decline in consumer spending and hotel visits.

Last year, Icahn was involved in a deal to buy Tropicana Entertainment LLC's TRPET.UL Atlantic City casino, and the financier has recently teamed up with Beal Bank to present a restructuring plan for bankrupt Trump Entertainment Resorts Inc TRMPQ.PK, also in Atlantic City.

The Fontainebleau, however, is not his first venture into Vegas. Icahn acquired the Las Vegas Strip's Stratosphere hotel and casino out of bankruptcy in 1998 and sold the property in 2007, along with three smaller casinos, to Goldman Sachs Group Inc (GS.N) for $1.3 billion.

The case is In re: Fontainebleau Las Vegas Holdings LLC, U.S. Bankruptcy Court, Southern District of Florida, No. 09-21481.

(Reporting by Emily Chasan; editing by John Wallace, Andre Grenon and Steve Orlofsky)

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