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Trump Entertainment says it's unlikely to be acquired

Casino operator plans to focus on cost cuts and high-stake players.

July 03, 2007|From the Associated Press

ATLANTIC CITY, N.J. — Donald Trump knows the art of the deal. But he won't be making one for his three casinos here.

The company that bears the flamboyant real estate mogul's name had been up for sale for several months. But Trump Entertainment Resorts Inc. announced Monday that it was unlikely to be sold, sending shares of the company plummeting.

The company said its board believed that none of the "indications of interest" met its expectations.

"Now we will continue as we have to focus on our strategic operating plan, which has produced strong results for us," company spokesman Tom Hickey said.

That plan stresses reducing costs and attracting more big-stake gamblers to the casinos.

The company is building a 786-room hotel tower at the Trump Taj Mahal, its largest casino, which is due to open next summer.

Trump Entertainment was in talks with a group led by former Atlantic City casino executive Dennis Gomes and real estate developer Morris Bailey about a possible sale of the casinos.

Hickey said the Gomes-led group submitted a formal bid for the company but would not discuss specifics, including why it was rejected. He would not say how many other interested parties there were.

New York-based fund manager Dune Capital Management, which is run by former Goldman, Sachs & Co. executives, was also said to be a possible bidder.

Robert LaFleur, a casino analyst at Susquehanna International Group, said financial markets had become skittish in recent weeks about financing buyouts, particularly in a market as challenging as Atlantic City.

Analysts for Bear Stearns & Co. wrote that the failure to reach a deal "speaks to the fundamental problems inherent in Trump's properties at present and the difficult operating environment in Atlantic City."

The company has about $1.4 billion in debt, which was expected to make any sale difficult.

Trump Entertainment shares fell $2.09, or 17%, to $10.49.

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