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Bally Purchases Casino-Hotel to Foil Trump Bid

January 19, 1987|From Reuters

CHICAGO — BAlly Manufacturing Corp. said Sunday it has agreed to buy its second casino-hotel in Atlantic City, paying $439 million for the Golden Nugget Casino Hotel on the boardwalk.

The move could thwart a hostile run by New York real estate developer Donald Trump to take over Bally. Trump, in gambling on such an effort, would run afoul of New Jersey laws that bar someone from owning more than three casino-hotels in Atlantic City, where he already owns two.

Trump owns 9.9% of Bally's stock and has indicated he might seek control of the Chicago-based gaming company.

Regulatory Roadblock

William Peltier, Bally vice president, said that by trying to acquire Bally after the company buys the hotel from Golden Nugget Inc., Trump would run up against New Jersey regulations.

He acknowledged, however, that Trump might sell off one of his Atlantic City properties to acquire Bally.

Efforts to reach Trump Sunday were unsuccessful.

Peltier said the $439-million price includes $60 million cash, $40 million in a new series of 10% non-convertible preferred stock, $40 million cash for real estate and the assumption of $299 million in Golden Nugget debt.

Peltier said Bally reached a definitive agreement Sunday. He said the company will borrow cash to make the acquisition.

If approved by New Jersey and federal regulators, the deal would give Bally its fourth casino-hotel--two in Atlantic City and two in Nevada. Peltier said the deal would make Bally the largest casino operator in the United States, placing it ahead of Holiday Corp.

Bally's other Atlantic City address is its Park Place casino-hotel.

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