Icahn Makes $1 Billion on Sale of Stratosphere and Nevada Casinos

Carl Icahn's American Casino and Entertainment Properties will make a $1 billion gain on the sale of its Nevada Casinos for $1.3 billion to Whitehall Street Real Estate Funds which is managed by Goldman, Sachs & Co. The deal is expected to close in eight months which would include the approval by the Nevada Gaming Commission and the Nevada Gaming Control Board.

Carl Icahn told Jim Simpson of InBusiness, referring to the Stratosphere, "I bought the property for a low price. If you buy low, and have the staying power, you can do well." He went on to say, "You'd be amazed how much money you can save if you run things yourself." Icahn was cheap. He didn't like to spend more money than he had to.

Icahn started investing in the Stratosphere in 1997 when he purchased $82 million of the property's $203 million in mortgage debt. Three years later, he bought the outstanding bonds for a reported 75 cents on the dollar when they became past due.

He took control of Arizona Charlie's on Decatur in 1998 when Becker Enterprises lost the property in Bankruptcy Court after failing to make interest payments on bonds it used to finance a Missouri riverboat enterprise. As with the Stratosphere, he purchased the bonds at a discount and gained control of the property.

In January 2000 he purchased Arizona Charlie's on Boulder for $43.3 million buying the bankrupt property, then called Sunrise Suites, before investing nearly $12 million on improvements.

In May 2006 he acquired the Flamingo Laughlin, the largest hotel in Laughlin from Harrah's Entertainment for $170 million and renamed it the Aquarius Casino Resort.

In May of 2007 he sold the whole lot, after starting ten years ago, for $1.3 billion. Carl Icahn is reported to be worth $13 billion, now it's $14 billion.

John Laub is the president of the CEO-CFO Group.

1. "Icahn Company sells 4 Nevada Casinos to Goldman." Reuters. April 23, 2007.

2. "Icahn Sells Southern Nevada Casinos." Arnold M. Knightly. Las Vegas Gaming Wire. RGTonline. April 24, 2007.

3. "Carl Icahn Made Another Billion, His Way." Jeff Simpson. InBusiness Las Vegas. April 27, 2007.

4. "American Real Estate Partners, L.P. Agrees To Sell Its Nevada Gaming Operations to Whitehall Street Real Estate Funds for $1.3 Billion." PR/Newswire. Company Press Release Source: April 23, 2007.

5. "Stratosphere To Be Sold." www.lasvegasadvisor.com April 23, 2007

6. "Mergers and Acquisitions: Deal with Sky-High Potential. Analysts see Possibilities in Land Acquired with Tower." Arnold M. Knightly. Las Vegas Review Journal. April 29, 2007.