Hard Rock Expansion
Is Placed on Hold
by Peter Sanders
From The Wall Street Journal Online
March 01, 2006
While executives at the Hard Rock Hotel & Casino in Las Vegas explore a potential sale of the property, the company's ambitious $1.2 billion plan to add condominiums, hotel rooms, dining and entertainment has been put on hold.
Hard Rock Hotel Inc., which owns the concern and is controlled by Peter Morton, disclosed this week it had received a number of unsolicited proposals to acquire the 11-story hotel-casino east of the Las Vegas Strip, and an adjacent 24-acre parcel Mr. Morton acquired in 2004 for $86 million. The 24 acres were slated for a five-building entertainment and lodging complex.
Jeff Leeds, president of Leeds Equity Partners, a minority owner who is handling the potential sale declined to provide details of the prospective buyers or the sale price. "If, in fact, we decide not to proceed with a sale, then we are ready to go ahead with the project," said Mr. Leeds. "But it's completely possible that a strategic buyer would have different plans for that land."
In October, Mr. Morton secured $1.25 billion in financing for the expansion project. Construction on the 1,350 units was scheduled to begin this summer.
One person with knowledge of the discussions said the sale price could exceed $600 million. Any sale would likely include the use of the Hard Rock trademark, but the issue is complicated since a separate company owns the rights to most of the Hard Rock trademark and already operates branded restaurants and hotel-casinos in other parts of the nation and internationally.
Email your comments to rjeditor@dowjones.com.
