Trump Company to Buy Trump Hotel
NEW YORK (AP) _ By an overwhelming vote, shareholders have approved a $480 million deal in which Donald Trump’s publicly-traded casino company will buy his Trump’s Castle Casino Resort.
The vote clears the way for the Castle, the last of Trump’s privately-owned Atlantic City, N.J., casino, to be folded into the publicly owned Trump Hotels & Casino Resorts Inc.
Trump said Monday that 82 percent of the votes cast were in favor of the transaction.
``Now after two years of hard work, everything is put together into one beautiful, simple, lovely, substantial company and people are shocked when they’re looking at the numbers because the numbers are terrific, the numbers are huge,″ Trump told reporters at Manhattan’s Plaza Hotel.
Wall Street was less optimistic. Trump Hotels dropped more than 4 percent, falling $1 in New York Stock Exchange trading to close at $23.25 a share.
In addition to its newest acquisition, Trump Hotels controls the Trump Plaza Hotel and Casino and the Trump Taj Mahal Casino Resort in Atlantic City, as well as the Trump Casino riverboat at Buffington Harbor, Ind. The Castle is one of two casinos located in Atlantic City’s booming marina district _ the other is Harrah’s Casino Hotel.
The deal, which involved 5.84 million shares of Trump Hotels common stock, is expected to net $100 million in stock and cash for Trump himself and boosts his holdings in Trump Hotels from 29 percent to 40 percent of outstanding shares.
Trump said he did not vote his own shares.
Matthew Russo, an analyst at the Wall Street firm George Sands and Co., said the deal is good for shareholders.
``If there is going to be further development of the marina land area it’s going to be important for the public shareholders of Trump Hotels to have a presence there,″ Russo said.
Robert Hallisey, an analyst for Boston-based John Hancock Funds, said his company voted its more than 100,000 Trump Hotel shares for the purchase.
Hallisey said he initially was concerned that the deal, which was announced in June, was too beneficial to Trump and had the public company paying too high a price for the Castle.
But Trump’s plans to expand the Castle and other recent casino deals, including an agreement by Sun International Hotels to pay $210 million for Griffin Gaming & Entertainment Inc., which owns the Resorts casino in Atlantic City, convinced Hallisey that the deal was a good one, he said.
``I’m pretty happy that the deal went through,″ Hallisey said. ``It looks like the plans that they have for the Castle ... are fairly exciting.″
Trump has said he will add 17,000 square feet of casino space and 1,500 hotel rooms in a new tower at the Castle, which currently has 728 rooms and 71,031 square feet of casino space. He also has said he will moor a 430-foot casino yacht at the marina which will include 40,000 square feet of gambling area, 1,300 slot machines and 80 gaming tables. The expansion is scheduled for completion by June 1998.
In addition, Mirage Resorts Inc. plans a $750 million, 2,000-room casino resort in the marina district and two other Las Vegas companies have plans to build there.
Trump said he welcomes additional development in the marina area.
``We’re confident that growth will only add to the activity and enhance the revenue generated at the Castle,″ he said.