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Wednesday, October 04, 2000
Copyright © Las Vegas Review-Journal
Directors OK deal to take Stratosphere private
By DAVE BERNS lasvegas.com GAMING WIRE
Stratosphere Corp.'s board of directors has OK'd a previously announced $44.3 million cash deal that will see the company go private via a merger with a newly formed subsidiary of billionaire investor Carl Icahn. The company also plans to shortly acquire ownership of the Stratosphere's adjacent shopping mall, according to a Tuesday filing with the federal Securities and Exchange Commission. American Real Estate Partners, a publicly held company in which Icahn owns about 85 percent of the shares, has the bulk of the Stratosphere's equity. The money to buy the shopping center and to build planned additions to the hotel initially will be provided by American Real Estate Partners. Icahn failed to return a Tuesday phone message left at his New York City office. Shareholders of the company who are not affiliated with Icahn will receive $45.32 per share, according to the SEC filing. Icahn companies, other than American Real Estate Partners, will receive $44.33 per share. The deal is expected to close early next year.
The Stratosphere is in the midst of a $65 million expansion that will add 1,002 hotel rooms, a 67,000-square-foot pool and recreation area. The 24-floor hotel tower will include a coffee shop, a porte cochere and tour bus entrance. Icahn also owns Arizona Charlie's and Arizona Charlie's East in Las Vegas. On Friday, he assumed control of the formerly bankrupt Sands hotel-casino in Atlantic City and is attempting to gain control of the financially troubled Claridge near the city's Boardwalk. He ranks 53rd on Forbes magazine's recent list of the wealthiest Americans with a net worth of $4.5 billion. The Stratosphere emerged from Chapter 11 bankruptcy reorganization on Oct. 14, 1998, with the cancellation of the company's previously issued stock, rendering those shares worthless. At the time of the reorganization, the owners of the property's first mortgage notes transformed their holdings into stock, with Icahn controlling an 89.6 percent stake in Stratosphere Corp., according to a 1998 SEC filing. Investment partnerships controlled by Icahn exchanged Stratosphere bonds for a total of 1.82 million common shares in the company, according to a previous SEC filing.
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