Las Vegas NowEchelon Still on Hold While Boyd Considers Stations

Echelon Still on Hold While Boyd Considers Stations

Las Vegas has hit the worst financial times in its history. Layoffs continue in the casino industry and one local gaming company on the verge of folding. In spite of that, Boyd Gaming, a Las Vegas staple, wants to buy out Station Casinos.

Boyd has offered $950 million for Station Casinos. The deal would not include Palace, Boulder, Red Rock and the Sunset properties. The offer came even though Boyd's new massive Las Vegas Strip resort Echelon is on hold.

Boyd Gaming, one of the oldest gaming companies in existence, says it can expand by buying all or some of Station Casinos. Analysts say if Boyd Gaming can make the deal it could prevent massive layoffs at Station Casinos under bankruptcy.

"Definitely they are not a company in the past that has bitten off more than they can chew," said Gaming Research Center Director Dave Schwartz, UNLV

Schwartz's latest project documents the Las Vegas historical financial swings. Boyd Gaming offered $950 million cash for Texas Station, Sante Fe Station, both Fiesta casinos, the 50% stake in Green Valley Ranch and Aliante Station, plus some smaller casinos.

"It's not something that they have to build and have to ramp up for two years. It's something where they already have a customer base. They combine it with their existing customer base," said Schwartz.

The offer comes while their massive Echelon project sits idol on the Las Vegas Strip. Construction was paused because two partners could not come up with financing. Boyd Gaming has $2 billion in a credit line. Sources in the company say they can get a better return on their money now through buying Station Casinos.

Financial analysts say Boyd has a window of opportunity a bargain price and the company would try this anyway even if it were building Echelon.

"If any company is going to have the confidence of investors and lenders, it would probably be Boyd. They have proven that they know what they are doing very well. Very big success in Atlantic City with the Borgata. They have been successful in many markets as well as Las Vegas," Schwartz said.

At this point, the plan for Echelon is to wait, do a redesign and then see if the partners can come up with financing to start building again in 2010.