In a Surprise Move, Griffin and Trump Agree to Cut Up Resorts
Climaxing a persistent, month-long campaign to buy Resorts International, Los Angeles entertainment mogul Merv Griffin reported a handshake agreement Thursday with controlling shareholder Donald J. Trump. It calls for the two to divide up the firm’s casinos.
Griffin, a producer of syndicated television game shows and new owner of the Beverly Hilton Hotel, now appears headed for the legal gambling business in Atlantic City, N.J., and Paradise Island in the Bahamas.
Trump, a real estate magnate and author of the best-selling “The Art of the Deal,” will get the monumental and uncompleted Taj Mahal casino in Atlantic City. His attorney said the Taj Mahal was what “captivated” Trump when he got into the casino firm last year.
Under a jointly announced “understanding in principle,” former talk show host Griffin is to pay public shareholders $36 a share for their Resorts’ Class A stock. By comparison, Trump had offered to pay $15, later raising that to $22. Griffin topped it March 17 with a bid of $35, now raised to $36.
The New Yorker got control of Resorts by paying $135 each for Class B shares, which have 100 times the voting power of the Class A shares, which number 5.7 million. Trump owns 95% of the 752,297 Class B shares. His attorney, Jack H. Nusbaum, said Trump “is getting substantial profit on his stock and paying fair value for the Taj Mahal.”
The surprisingly sudden compromise agreement followed an early morning meeting after Wednesday meetings in New York. Trump and Griffin, who have been at legal dagger points in the contest for the company, met face to face during the series of meetings, sources said.
Griffin is to become the owner of the company along with its Resorts International Casino Hotel on the Atlantic City Boardwalk, along with the Paradise Island hotel-casino complex near Nassau and most company assets, including important land holdings in the New Jersey gambling capital, according to sources.
Griffin lawyer Thomas E. Gallagher, who said his client was pleased with the deal, said he expects that more financial information will be disclosed in several days.
Meanwhile, an indication of the new serenity permeating the battle scene came with some complimentary words for Trump on Thursday from a lawyer who has accused the him in court of manipulating the market price of Resorts’ Class A stock.
“He has a reputation of being a warm person as well as a good businessman,” commented William Klein II, who represents two institutional holders of Resorts Class A stock. “That personality was helpful here (in reaching the accord with Griffin).”
Applied Pressure
Klein said that if the buyout is consummated, it will be “a rather diplomatic and creative solution to a very difficult problem.”
The lawyer said the legal offensive mounted for the Griffin offer undoubtedly put “a lot of pressure” on the Resorts committee of outside directors and contributed to the compromise. He also said Trump, “who has written a book about his tenacity,” has said he doesn’t like litigation.
In addition, Klein said, Trump did not appear to be in his proper element in a public company, adding:
“I think being in a public company for a wheeler dealer, people of his ilk--they deal and they wheel. A public company is not a good place for it.”
Alan Appelbaum, New York attorney representing the Resorts independent directors, said his clients thought the announced agreement sounded “exciting for the public stockholders” and were looking forward to getting the details.
Before returning to Los Angeles, Griffin had an informal get-acquainted meeting Thursday morning with members of the New Jersey Casino Control Commission, whose approval is required of all casino owners.
