ARE TAKEOVER'S BY INVESTMENT GROUPS A WAVE OF THE FUTURE ?

Implications: It makes an interesting way to have your cake and eat it too. Just take a serious look at the recently semi completed deal with Harrah's Entertainment. It still requires approval. The $17 Billion takeover price was about what I had suggested in prior articles on the subject. If you add on the $10 Billion plus additional acquired debt, it places this purchase right at the top of all the casino property buyouts. It also may not be the end of what what is seen in the near future. There are a couple of companies just turning ripe enough to catch the eye of other investment groups trying to make a break through into this extraordinary business of gaming. It's going to interesting to see how the market will react if this becomes the norm rather than the exception.

Analysis: The fact that investment firms are now looking to enter the gaming industry should not really be a surprise to anyone. It's the natural way of things in today's dealing. The private investment groups are a way for large companies to be acquired and still keep senior management to provide the day to day business and keep solvent during transition and beyond. Remember, that it's also the way for management with stock options to cash out and then participate in the options and bonuses offered by the new owners. What a luxury that is!

What could be next on the agenda for these purchasers of mega companies in gaming. The two that seem to come to mind are Boyd Group and Stations Casinos. Both of these companies are staying on the fast track with lots on their plates at this time. I have mentioned that Stations was talking to a couple of private companies about a possible buyout or maybe a partnership that would allow them to keep progressing with their proposed new construction. It has already been announced that they plan on continuing with their quest to open Alianti Station and Durango Station. They also have another location in the same area that will come along soon after. Plans have not been announced for their property on the Boulder Hwy that was the Showboat for many, many years. Needless to say, they have lot to do in the near future. The Boyd group on the other hand is well established in both the local and tourist trade. They certainly upgraded their image when they took over the Coast Casinos some time ago. The recent closing of the Stardust and the capture of the property next to them in a deal with Harrah's will be a terrific start to their new Echelon project. It will put them into the high end business and extend their value for possible takeover bids. I really don't think that there is much opposition in the Boyd camp but I don't see any real movement toward sale until the new project is fully underway.
 
Is the market going to stand still and allow these takeovers with out trying to find a way to counteract these purchases? There are stockholders out there that have a keen interest in gaming. The stockholders generally do well with these buyouts, but look to reinvest in what made them a little richer. They may look to pressure the powers that be in the market. They may also want them to take a closer look at what's going on and offer an alternative for them to consider when buying stocks.

As always, it's like trying to play blind man's bluff with the future. I am waiting to see which road the industry will travel down next...