Jul. 3, 2007 - ATLANTIC CITY -- Unable to strike a deal to sell his namesake company's trio of Atlantic City casinos, celebrity deal-maker Donald J. Trump said yesterday that he would like to run them himself.

Trump, who owns 31 percent of Trump Entertainment Resorts Inc. and is chairman of the company's board of directors, said his fellow directors were "dying for me to run the company like I did 12 or 13 years ago. I used to kill everybody. Nobody -- not even Caesars -- could beat me back then."

Trump last served as chief executive officer of the company in 2005. It entered bankruptcy first in 1991 and again in 2004.

James Florio, the former New Jersey governor and a member of the nine-member board, declined comment last night on Trump's assertion that the board wanted Trump to lead the casinos.

Early yesterday, the company issued a statement saying its board had concluded that "none of the indications of interest received to date . . . was in the best interests of the company and its shareholders."

The statement also said that there were currently no discussions with bidders.

Trump had been seeking $2.2 billion, including the assumption of $1.5 billion in debt, for the company's three Atlantic City casinos. Shares of Trump Entertainment plunged yesterday to $10.49 a share on the Nasdaq, down $2.09, or 16.6 percent, in response to the announcement.

Trump, who had said from the start of the bidding process that he was ambivalent about a sale, said the company was moving forward.

"We have a good company, and we're going to run it that way," he said.

Trump had enlisted Merrill Lynch & Co. Inc. in March to explore the company's options.

The leading bidder, with whom Trump was dealing exclusively, was a private-equity partnership of former Trump Entertainment executive Dennis Gomes and New York real estate magnate Morris Bailey. They had teamed up last year in a failed bid to win a slots license in the Poconos. They were appealing that decision before the Pennsylvania Supreme Court.

"I am very disappointed, as you can imagine, as I love Atlantic City and want to eventually participate in something there," said Gomes, who served as president of the Taj Mahal from 1991 to 1995, and at the former Aztar Corp., which owned the Tropicana Casinos in Atlantic City and Las Vegas.

An independent Wall Street firm had valued Trump's casinos at $11 a share. Trump wanted $22 a share. Morgan Stanley, Trump Entertainment's largest group shareholder, reportedly wanted $17, while Gomes and Bailey were offering less than $17 a share, according to sources representing both the seller and bidder.

Trump acknowledged yesterday that the offer from the Gomes-Bailey partnership and a bid by Dune Capital Management L.P., headed by former Goldman Sachs Group Inc. executives, were too low. "None of them met our expectations," he said.

Former Trump Entertainment CEO James Perry, who was fired by Trump and the board of directors for opposing a sale to Gomes and Bailey, announced his retirement June 19. His resignation became effective Sunday.

Trump said with Perry's departure, "millions of dollars of corporate overhead would be reduced." Among those terminated were members of Perry's inner circle, brought from his former company, Argosy Gaming Co., of Alton, Ill., where he served as CEO. They included Paul B. Keller, the company's executive vice president of design and construction, and Virginia McDowell, the executive vice president and chief information officer, according to a filing with the Securities and Exchange Commission yesterday.

Trump Entertainment owns the Trump Taj Mahal, Trump Marina and Trump Plaza casinos in Atlantic City. The three casinos have gone through bankruptcy twice, beginning in the summer of 1991. The company filed again for bankruptcy in 2004.

This year, revenue at all three Trump casinos has been depressed by slots competition from Pennsylvania and New York and new smoking restrictions in Atlantic City that limited smoking to 25 percent of the casino floors.

Trump was dealt a blow June 20, when the New Jersey Casino Control Commission ruled that as a condition of his three casinos' getting their five-year licenses renewed, they would have to submit earnings statements monthly rather than quarterly, as is required of other Atlantic City casinos.

In the end, the economics did not support a sale, according to Wall Street analysts.

"The structure is already very leveraged, and the operations have not fully turned around yet," said Barbara Cappaert of KDP Investment Advisors Inc., of Montpelier, Vt., who has tracked Trump for more than a decade. "Not getting involved in a leveraged deal at this juncture gives the company more time and flexibility to weather the competitive pressures from Pennsylvania."

Existing and new competition in Atlantic City also has eaten into Trump's market share, precipitated by the Las Vegas-style Borgata Hotel Casino & Spa, which debuted in the summer of 2003. As part of a spring 2005 bankruptcy restructuring, Trump's stake in the casino company decreased from 52 percent to 31 percent, and he was stripped of his CEO title. After that, Morgan Stanley began pumping $500 million into renovations for Trump's casinos, and Trump brought in Perry that summer to spearhead a turnaround.

"The question becomes who's in charge, and how he factors into all of this," Cappaert said of Trump, who controls three of the nine seats on the board.

She said Trump also might have more time on his hands with NBC considering pulling the plug on The Apprentice, his reality-TV show.

"He comes in amid all the chaos and looks to take operating control to try and further the turnaround," she said. "With a guy like him, I wouldn't rule it out."

Contact staff writer Suzette Parmley at 215-854-2594 or [email protected].

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