Donald Trump outdid his usual $1 million-per-speech payday and picked up a tidy $25.6 million in just a few hours yesterday without even saying a word publicly.
Shares of the Trump casino group soared nearly 21 percent in an early buying frenzy on prospects that a private equity firm is preparing to acquire it.
Trump's own personal stock swelled in value, at least on paper, to $148.2 million in the busy trading - nearly 11 times the usual daily volume and the biggest embrace of the shares in years.
The company, Trump Entertainment Resorts, two days ago said its board is considering offers to buy the company. Shares shot up $2.73 to $15.80 and its bonds hit a record, with an 8.5 percent note due in 2015 climbing 3.3 cents to 102.4 cents on the dollar.
Three months ago Trump hired Merrill Lynch to determine options for its future, including finding a buyer for all three Trump casinos in Atlantic City, as a whole or individually, or finding partners to help in a costly makeover of the resort hotels.
Trump Entertainment, of which Trump is chairman and president, said yesterday it formed a committee to consider the offers it received. Analysts believe private equity buyers are more likely to make a play for the casinos than other gaming companies.
Trump casinos have struggled for profits since the group emerged from a bankruptcy makeover two years ago, which helped reduce interest rates on its nearly $1.4 billion in debt.
It its latest quarter, the company narrowed its losses to $8.13 million from $9.72 million a year earlier, while revenue dropped 1.4 percent to $234.3 million. Last year it posted revenue of $1.03 billion, up from the prior year.
Atlantic City's casinos are being clobbered by competition from Pennsylvania, Connecticut and upstate New York, and by local no-smoking laws that have cut into attendance, say industry sources.
Last month was one of the worst Aprils on record for Atlantic City's dozen casinos, down an average 10 percent, with Trump Marina off 13.2 percent, the Trump Plaza down 12.6 percent and the Trump Taj Mahal down 19.6 percent, said the New Jersey Casino Control Commission.
Reprinted from New York Post
Our take on the news: Great news for everyone. Trump gets himself out from underneath a real difficult industry. Shareholders benefit from the increased share price of a possible buyout. The acquiring equity firm will give its full attention to bringing this investment to its full potential. Win... win... situation.
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