The Tropicana Casino & Resort Atlantic City — Courtesy: Casino Reinvestment Development Authority
By Joshua Burd
Hedge fund manager Carl Icahn has sold the Tropicana Casino & Resort in Atlantic City as part of a seven-property, $1.85 billion deal announced Monday.
Icahn Enterprises L.P. said its majority-owned subsidiary, Tropicana Entertainment Inc., has agreed to sell Tropicana’s real estate to Gaming and Leisure Properties Inc. for a reported $1.21 billion. At the same time, the operator has agreed to merge its gaming and hotel operations into Eldorado Resorts Inc., which is leasing the properties for $640 million.
The deal comes a decade after Icahn first acquired an interest in Tropicana before going on to become the majority owner in 2010. That effort included repositioning the Boardwalk property in Atlantic City, which is now one of the resort town’s top-performing gaming halls and hotels.
“Tropicana was bankrupt and desperately needed new leadership,” Icahn, chairman of Icahn Enterprises, said in a prepared statement. “At that time, we identified this undervalued asset as being a perfect situation to deploy our modus operandi, by which we seek to acquire undervalued assets, nurture, guide and improve their condition and operations, and to ultimately greatly enhance value for all shareholders.
“By hiring a great CEO in Tony Rodio and a great management team, and by reinvesting every single penny of profits back into the company, we turned Tropicana into a great casino company that today owns seven casinos. We thank Tony, the management team and all Tropicana’s employees. Without them, this could never have been accomplished.”
The news also comes a year after Icahn’s sale of Trump Taj Mahal to a group led by Hard Rock International, which is now overhauling the property and planning to reopen this summer under its iconic brand. Farther up the Boardwalk, the shuttered former Revel casino is also slated to reopen this year under new ownership as the Ocean Resort Casino.
The Tropicana deal is expected to close in the second half of this year, according to a news release. The transaction, which does not include Tropicana’s Aruba assets, is not subject to any financing condition.