April 20, 2010 / 12:49 AM / 9 years ago

UPDATE 1-Station Casinos gets $772 mln bid to exit Chap. 11

* Fertittas lead $772 mln “stalking horse” bid

* Rival bids still possible

* Boyd Gaming remains interested in takeover

By Jonathan Stempel

NEW YORK, April 19 (Reuters) - Station Casinos Inc [STN.UL] said its founding Fertitta family is leading a $772 million bid to acquire most of its assets, which could enable the casino operator to emerge from bankruptcy by the end of the year.

Monday’s announcement appeared unlikely to dissuade rival Boyd Gaming Corp (BYD.N) from its effort to acquire some of Station’s assets through the Chapter 11 process.

The proposed transaction calls for Chief Executive Frank Fertitta and his brother Lorenzo, real estate investment firm Colony Capital LLC and some mortgage lenders to form a new company that will make an initial bid for substantially all its assets.

Station said the “stalking-horse” bid involves a “significant new investment” by the Fertittas and a “substantial cash recovery” for senior bank lenders. It said the bid has support from a committee representing lenders of more than 60 percent of its senior secured bank debt.

Rival bidders would have a chance to make competing bids in a court-supervised auction.

In a statement, Frank Fertitta called Monday’s transaction an “important step toward maximizing the value of all of the Station Casinos’ properties.”

Boyd spokesman Rob Meyne said Station’s announcement “contained very little in the way of detail about Station’s efforts to reorganize its debt, a process that has now been going on for more than a year. We remain interested in acquiring Station assets and look forward to reviewing the plan when it is made available to the rest of the creditors.”

Station said it operates 18 casinos and resorts, including Red Rock Casino Resort Spa. It caters mainly to residents of the Las Vegas area rather than tourists.

The company filed for protection from creditors last July after being unable to ease the debt it took on in 2007 when the Fertittas and Colony Capital took it private in a $5.4 billion leveraged buyout.

It said its reorganization plan now has support from holders of almost 90 percent of its secured debt.

The case is In re: Station Casinos Inc, U.S. Bankruptcy Court, District of Nevada, No. 09-52477. (Reporting by Jonathan Stempel; Editing by Richard Chang)

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