AU Crown Resorts Poised to Submit EOI to Buy Bank Foreclosed Las Vegas Complex
The Australian Financial Review came out with a report last Tuesday that the Crown Resorts intends to submit an Expression of Interest (EOI) in acquiring The Cosmopolitan of Las Vegas, which is currently up for sale for $2 billion. As of writing, however, both Crown Resorts and Deutsche Bank have not given their comments to confirm such reports.
After all, a Vegas expansion seems to be an elusive goal for James Packer's Australian casino company, in view of two previous failed attempts. The first was in 2007, which did not materialize after the Federal Aviation Administration rejected Crown's proposal of building a towering 1,888 feet Crown Las Vegas Hotel. The second was in 2009, involving a $1.8 billion acquisition deal for Cannery Casino Resorts, which Crown Resorts subsequently terminated but not without paying pre-termination fees and penalties amounting to $320 million.
When asked about the failed U.S. expansion plans, the Aussie billionaire was quoted as saying that a U.S. expansion venture was one of his biggest strategic mistakes.
About the Cosmopolitan of Las Vegas
The Cosmopolitan is a three-year old 3,000-room hotel casino acquired by Deutsche Bank in 2008 through foreclosure proceedings filed against the developer Ian Bruce Eichner. At the time of foreclosure, the 3.5 hectare property was still an uncompleted construction project for a residential condominium tower.
Later, however, rather than proceed with the construction of a residential condominium, the German bank saw to the completion and operation of the hotel casino complex that it is today. Yet the hotel casino venture eventually proved to be an unwise investment, since its operation resulted to incurrence of substantial losses instead of generating the expected profits.