Station offers to buy Icahn's interest in Arizona Charlie's

Bruce Becker is still in the driver's seat to retain control of Arizona Charlie's, but Station Casinos is positioning itself to obtain the neighborhood hotel-casino should Becker's plan fail.

As in the past, Station Casinos still isn't commenting on its moves in the fight to see which company will bring Arizona Charlie's out of bankruptcy.

Less than 24 hours after Becker Gaming reached an agreement with billionaire Carl Icahn's High River L.P. that would allow Becker to stay in control of Arizona Charlie's, Station Casinos Inc. wants to take Icahn's place if Becker's plans fail.

Station Casinos offered to buy Icahn's share of the debt in Arizona Charlie's. If financing slated to fund Becker Gaming's plan fail, that would allow Station Casino's to assume control of Arizona Charlie's.

"My position stays the same," Becker said by phone. "They must not want Carl in the market. I can't answer for them."

Icahn, however, has already received bankruptcy court approval to take over the Stratosphere hotel-casino.

Becker's financing is coming through United Healthcare Financial Services of Santa Monica.

Under either scenario, Icahn stands to make a profit. His attorney, Ed Weisfelner, said he had only spoken briefly to Icahn about Station Casino's offer, but that he would recommend it to his client.

Becker Gaming, High River and Station Casinos were all vying for control to bring Arizona Charlie's out of bankruptcy.

Icahn owns about 52 percent of the outstanding notes on the neighborhood casino while Station owns a minority interest in the notes. Tuesday, Becker and High River announced an agreement that would allow Becker to remain in control by paying a prorated share of $61.6 million to first mortgage noteholders.

That amount is close to what Station Casinos was offering in a competing plan when it offered $61 million.

In return, Icahn and other noteholders would give up their claims. If Becker's financing fails to materialize or is delayed beyond July 31, High River would take control of the 258-room hotel-casino and pay noteholders their prorated share of $52 million.

Also, the Becker family would agree to lease the property on which Arizona Charlie's sits for parking; and current management would stay in place until Icahn gained a gaming license.

Station's proposal would simply put it in the situation of Icahn.

"They called us," Weisfelner said. "They liked the deal so well they'd like to step into our shoes."

In past hearings, Station attorneys have said that if they were unable to settle on the parking leases with the Becker family, that would be a "deal breaker."

Weisfelner said Icahn was happy with the original deal. It would allow him to either be repaid in full or take control of the casino. But Weisfelner added that Station could delay in court the deal struck between High River and Becker. The Station proposal would allow Icahn to collect his money and be done with the matter.

Yet Weisfelner was concerned about the perception that could create. "We don't want this court to be concerned we're cashing out and leaving the other bondholders on their own," he said.

But Ed Fox, who represents Banker's Trust, an indentured trustee, said he's not sure there's a better plan for his client.

"If we find a reason to attack this, the question is, 'Where we end up if we were successful?"' Fox said.

With the opportunity to walk away from Arizona Charlie's, Icahn would be allowed to concentrate on the Stratoshphere.

"I think the commitment Icahn is intending to make with the Stratosphere overshadows anything with Arizona Charlie's," said Jeff Silver, who is serving as High River's gaming counsel. "I think that's where his focus has to be."

Confirmation hearings will continue Wednesday before U.S. Bankruptcy Judge Linda Riegle.

Arizona Charlie's declared bankruptcy in November, partly due to a Missouri riverboat deal gone bad. Icahn bought his share of the resort's $55 million debt last summer.

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