Maloofs' stake in Palms at 2 percent


Is the Maloof family's ownership of the Palms coming to an end?

Not yet, but according to regulatory documents filed with Nevada gaming officials, the Maloof family's ownership stake in the Las Vegas celebrity hangout has declined to about 2 percent.

The release of the documents Monday comes a week after George Maloof, who runs and opened the resort in 2001, confirmed Leonard Green & Partners LP and TPG Capital would assume majority control in the casino and hotel.

At the time, Maloof declined to comment on whether the deal meant the buyout firms would assume a controlling stake in the Palms.

"We have an equity stake in the Palms," Maloof told the Las Vegas Review-Journal on June 14.

According to the documents filed with the Nevada Gaming Control Board, the Maloofs will own 2 percent of the casino once the deal is approved by regulators. TPG Capital and Leonard Green & Partners each will own 49 percent.

The deal was not listed among the items to be considered Thursday by the Nevada Gaming Commission during its meeting in Las Vegas.

The property was backed by a $400 million revolving credit agreement that was due in October and wasn't refinanced. The credit agreement was extended before Leonard Green and TPG converted the loan into equity.

The Palms ran into problems as gaming and hotel revenue declined in Las Vegas during the economic downturn. Nearly every casino company has struggled during the past three years to repay its debts; however, most either refinanced, went through bankruptcy proceedings or were able to extend their loans.

Besides the Palms, the Maloof family owns the NBA's Sacramento Kings. The struggling franchise had been rumored to be moving to Las Vegas, before a deal to move the team to Anaheim, Calif., collapsed this year.

The Palms has 95,000 square feet of casino space and is marketed as both a celebrity hangout and a place for local slot machine players.

The property has 1,300 rooms, including several high-end suites in the Fantasy Tower.

Suites themed after the Playboy Club have private outdoor pools, while others have a bowling alley and a basketball court. The Palms also has a 600-unit condominium tower.

Contact reporter Chris Sieroty at csieroty@reviewjournal.com or 702-477-3893.

 

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