|By Amanda Finnegan, Las Vegas
SunMcClatchy-Tribune Regional News
June 14, 2011--The Palms Casino Resort announced today it is partnering with TPG Opportunity Partners to "significantly reduce" debt at the property.
TPG Opportunity Partners is a partnership between Leonard Green & Partners and the Texas-based TPG Capital investment firm.
George Maloof, who runs the Palms on behalf of the Maloof family, said under the plan, the Palms is converting debt into equity, leaving the property debt-free.
Maloof said TPG Capital has been a debt holder for the past year and a half and said it brought in Leonard Green as a debt holder last year. Including the two investors and the Maloof family, Maloof said debt is estimated at about $400 million.
Leonard Green and TPG said in a joint statement, "We are excited to partner with the Maloof family on this world-class asset and iconic brand."
Maloof said the partnership better positions the resort for growth. The hotel, which opened in 2001, consists of two hotel towers and a condo hotel tower.
"It means a lot," Maloof said. "It's good for our staff and puts us in a great position. We've been doing relatively well in the last six months in a tough market."
When asked for specific growth plans, Maloof said, "not right now, but we have lots of thoughts."
The deal between TPG Capital and the Palms has been rumored for months but not confirmed until Tuesday. In January, Bloomberg reported that the firms had acquired most of a loan for the casino last year and sources close to the deal said the company might take an equity stake in the first quarter as part of the restructuring.
Maloof said the partnership won't change the family's or his role at the property.
Station Casinos and an affiliate of the Greenspun family, owner of the Las Vegas Sun, are minority investors in the Palms.
"We are very pleased that George has worked out an arrangement that makes sense for he and his family. As to our participation, we are having ongoing conversations what our involvement, if any, will be," said Bruce Deifik, president of the Greenspun Corporation.
As for Station Casinos role in the property going forward, spokeswoman Lori Nelson said, discussions are ongoing.
"We're pleased that George reached an arrangement with TPG," she said.
TPG Capital, along with Apollo Global Management, took Caesars Entertainment (then Harrah's Entertainment) private for $30.7 billion in January 2008.
Leonard Green & Partners, a Los Angeles-based investment firm, tried to take control of M Resort with the Marnell family from lenders last year, but were outbid by Penn National Gaming. Penn National spent $230.5 million to acquire M Resort's $860 million in debt in October. The acquisition was approved by Nevada gaming officials earlier this month.
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