DESTROYING CAPITAL: THE WINNER'S CURSE AND PRIVATE EQUITY

(previously posted under Keith McCullough: 05/30/08 3:11 PM EST)


Back in 2006, 3 companies bid up the price of Aztar Corporation to a whopping 12x EBITDA, an unheard of multiple for a casino company acquisition.

With most of those assets now in bankruptcy, thanks to winning bidder Columbia Sussex's mismanagement (among other factors), the state-appointed conservator cannot give the AC Tropicana away.

Remember, along with Las Vegas land, the AC Trop was the prized asset in the acquisition. Yesterday, the conservator asked the New Jersey Gaming Commission for additional time to complete the sale of the casino.