Golden Nugget Still Wants Hilton Hotels
Stephen A. Wynn, chief executive of Golden Nugget Inc., told stockholders Thursday that, despite past reverses, his company has not given up its interest in acquiring a controlling block of Hilton Hotels Corp. stock.
Wynn told the meeting in the ballroom of its hotel-casino here that “we have an abiding, ongoing interest in that block of stock.”
However, he noted that there is little Golden Nugget can do until the Los Angeles County Superior Court makes some decisions about the 27.4% block of Hilton stock--about 6.8 million shares--that is tied up in a probate dispute over the estate of the late Conrad Hilton.
Wynn’s comments were the first from his company since Hilton Hotels’ management won an earlier court fight a month ago and succeeded in passing several anti-takeover measures at its annual meeting that were opposed by Golden Nugget.
“Is it over?” Wynn asked. “Not necessarily.” He traced the brief but intense efforts that his company had made to acquire control of Hilton after learning that New Jersey casino regulars had denied Beverly Hills-based Hilton a license to open its nearly completed hotel-casino in the marina area of Atlantic City.
The challenge for Golden Nugget at the time, he said, was to see if his company might be able to acquire the block of Hilton stock without spending too much money in the preliminary effort.
What Golden Nugget found out, Wynn said, was that “the person who owned 27% of Hilton Hotels is pretty much the judge"--Judge Robert I. Weil, who is handling the Conrad Hilton probate matters.
Wynn told the stockholders that Golden Nugget showed that it can make a $500-million offer and “handle deals of that size.” Despite its run at Hilton, however, Wynn maintained that Golden Nugget is not an “unfriendly takeover company” and does not intend to go around attempting takeovers in general.
He noted that the company, along with the rest of the gambling industry in Atlantic City, is likely to face lower operating profits this year. Golden Nugget recently abandoned plans to build a second Atlantic City casino and took a $15-million loss on the project in its fiscal 1984 results.
Although Wynn said the company outperforms its competition in Atlantic City, there is nothing in the immediate future that gives rise to any optimism about the state of business there. However, he said, the “strong will survive,” and he considers the Golden Nugget company to be “pretty well invincible.
Discussing the company’s near-range planning, Wynn said that management has been considering expanding its efforts to reach customers lower on the economic spectrum than it has been doing in the last few years with its Las Vegas and Atlantic City casinos. He said that perhaps it is time “for us, like General Motors, to spread our base,” but he said he doesn’t know “if we’ll go to the Chevrolet level.”