Thursday, Feb. 27, 1997 | 11:59 a.m.
The planned sale of Players Island, a 500-room resort on the south end of Mesquite, appears to be on hold and company officials aren't talking about a conference call that was to complete details of the transaction on Wednesday.
John Groom, Players' chief operating officer, said earlier this week that a teleconference on Wednesday would wrap up details of the property's sale to Robert "Randy" Black, who operates the privately held Virgin River hotel-casino in Mesquite.
That, apparently, did not happen.
"(There is) no announcement or comment that I would make," Howard Goldberg, chief executive officer of Players International Inc., which owns Players Island, said this morning. "I cannnot tell you when or if that will come out because we have made no decision as of this time."
Peter Aranow, executive vice president of finance for Atlantic City, N.J.-based Players International, reiterated that the company has signed a letter of intent to sell the property to Black. He called Wednesday's conference call "an update meeting."
That letter, signed late last month, allowed Players to continue to solicit offers from other parties. Groom was attempting to drum up competitive offers from Las Vegas in early February.
Aranow said today no timetable has been established on closing a deal with Black or another operator. The letter of intent is due to expire Friday. If the deal with Black isn't consummated, Players would be required to pay a breakup fee. Players has not disclosed that amount, but sources say the standard is about 2.5 percent of the sales price.
Terms of the proposed sale have not been disclosed, but Players officials have said they would receive less than $30 million for the property, which includes a long-term lease on an 18-hole golf course that opened last fall.
Players International stock closed at $5.44, down 6 cents, on trading of 74,500 shares on the Nasdaq exchange on Wednesday. At 7:45 this morning, the price had not moved.
Aranow also said he could not confirm if other bidders had entered the picture or published reports that Black's bid is being backed by Las Vegas gaming executive Michael Gaughan.
Gaughan was out of town and unavailable for comment Wednesday and executives of Coast Resorts Inc., the company operating Gaughan's Gold Coast, Barbary Coast and Orleans hotel-casinos, did not return phone calls.
Players International hopes to unload the property in the suddenly crowded Mesquite market in order to concentrate more on riverboat projects in Lake Charles, La.; Metropolis, Ill.; and Maryland Heights, Mo. The Maryland Heights project, located in suburban St. Louis about five minutes from the city's airport, is a joint venture with Harrah's Entertainment and will open within two weeks.
Including Players Island and Virgin River, there are four resorts in Mesquite, a small agricultural community on the Nevada-Arizona border. About 75 miles north of Las Vegas on Interstate 15, Mesquite is the first community travelers from Utah see in Nevada. In recent years, Players and the Oasis hotel-casino, the largest development in Mesquite, have worked to market the town as a golf resort with three 18-hole courses.
Analysts said a sale price of $30 million would represent a $40 million after-tax hit to the company's net worth. Stockholder equity was reported on Dec. 31 at about $194 million before a restructuring change. A third-quarter loss dropped the value to about $192 million. The resulting sale represents more than a 20 percent decline in net worth.
But Players International looked at the sale as an opportunity to unload a property that would take at least three years to turn a profit. Company executives are banking on success at Maryland Heights to reverse Players' fortunes. Black, who already markets the Virgin River property, has much of his promotional strategy in place.
Top Players shareholders, including entertainer Merv Griffin's privately held Griffin Group, have not commented on the proposed sale. Other institutional investors have had no comment on the proposal.
Groom attempted to find a higher bidder in the four weeks leading up to the Feb. 28 letter of intent deadline, but some interested buyers said they didn't have enough time to secure the financing needed for a deal.
Groom said assuming the sale to Black is completed, he expects there to be a transitional period while Players turns over operations to the new owner. He said he expects most employees would be retained by the new owners and that managers not staying with the property would be invited to transfer to Players' riverboat properties.
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