Harrah's Entertainment Inc. has filed an application to purchase the struggling Planet Hollywood Resort & Casino in Las Vegas, the Nevada Gaming Control Board said Monday.
The casino giant has formed a new subsidiary, PHW Las Vegas LLC, with the intent of taking over the Planet Hollywood in Las Vegas. PHW filed the application to casino regulators last week, a person at the Control Board said. The Las Vegas Planet Hollywood is a separate entity from the restaurant chain, which has locations around the world.
Harrah's began pursuing Planet Hollywood in September when it purchased a $140 million piece of Planet Hollywood's $870 million debt for an undisclosed amount from Goldman Sachs Group.
Planet Hollywood defaulted on its commercial mortgage around the same time. That gave lenders the right to foreclose on the property, Planet Hollywood said in a filing. However, the company is still in discussions with its lenders, Planet Hollywood spokeswoman Amy Sadowsky said Monday.
A person close to the situation said that it appears the slice of debt Harrah's purchased in September could give the casino giant enough influence over the other lenders to control the property. It's unclear whether or not Harrah's has purchased additional debt since then.
Harrah's controls six contiguous Las Vegas casinos just north of Planet Hollywood. Those properties are across the street from City Center, the $8.5 billion MGM Mirage resort which is set to open in December.
In an email to employees last week, Harrah's Chief Executive Gary Loveman said the location made the distressed Planet Hollywood an attractive acquisition. Harrah's is working on a plan to own and manage the property, Mr. Loveman wrote.
"This is an attractive proposition because of Planet Hollywood's proximity to our other resorts on the Strip, its high-quality product offering and its strong brand name," Mr. Loveman wrote in the email.
Starwood Hotels & Resorts Worldwide Inc. currently manages the project's hotel and also has a minority stake in Planet Hollywood.
Restaurateur Robert Earl, who developed the movie-themed Planet Hollywood restaurant chain, and investment manager Bay Harbour Management acquired the Las Vegas property in 2007.
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