Trump Quickly Rejects Hilton Bid for Casino
Hilton Hotels Corp., pushing forward in its attempt to establish a hotel and casino in Atlantic City, N.J., offered $165 million to buy the struggling Trump Castle on Thursday but was quickly rejected by owner Donald J. Trump.
Trump Associates said it had no intention of selling the hotel-casino, which Hilton built but was forced to sell to Trump for $320 million in 1985 after being denied a gaming license. Last month, however, Hilton successfully reapplied for a permit to own a casino.
“The offer was not raised to a basis for discussion,” said Nick Ribbis, chief executive of Trump Hotels. “We’re not bargaining.” He said the offer was “just an attempt to interfere in our business.”
But officials for Beverly Hills-based Hilton said Thursday that the offer stands until July 29, two days before the New Jersey Casino Control Commission said Trump must show that he can run the Castle profitably.
Despite Hilton’s statement that its offer stands firm, many hotel analysts said they viewed the corporation’s offer as a maneuvering tactic. “If Hilton’s offer is $165 million I would expect it to be declined, but that does not mean there won’t be further negotiations,” said Saul Leonard, a casino and hotel consultant in Los Angeles.
Carol Palmer, a hotel consultant with Duff & Phelps in Chicago, said Hilton and Trump will be “going back and forth, and you will probably see some dialogue.”
Analysts also said they believed that Hilton would have the upper hand in any further negotiations. “Hilton has the flexible financing . . . and the Castle needs a buyer,” Palmer said.
The Castle has not made a profit in recent years and recently missed a $41-million payment to bondholders, some of whom may put pressure on the well-known developer to sell.
Hilton’s offer comes three weeks after the New Jersey casino commission granted Hilton a license enabling it to operate a casino in Atlantic City. Six years ago, Hilton’s application for a license was denied because of the corporation’s connections to a reputed mob lawyer, Sidney Korshak. Hilton Hotels, stunned by the decision, then sold the hotel-casino to Trump.
The gaming and hotel corporation has since severed ties with Korshak.
Hilton has patiently gone through the long process of getting a license to open a casino at the boardwalk gaming resort. It already runs six casinos in Las Vegas.
News of Thursday’s offer pushed up both Hilton’s stock and Castle’s bonds. Hilton stock closed Thursday on the New York Stock Exchange at $41.75, up 50 cents. The Castle’s 7% bonds due 1999 rose $4 to $33 per $100 face amount.
