- The Washington Times - Monday, March 12, 2007

ATLANTIC CITY, N.J. (AP) — The casino company that bears Donald Trump’s name said yesterday it has hired an investment firm to help it explore strategic alternatives, which could include a sale.

Trump Entertainment Resorts Inc., which lists Donald Trump as chairman, said it retained Merrill Lynch to assist in identifying and evaluating capital structure, financing and other options. It would not comment further.

“The real question is whether Trump is in play,” Adam Steinberg, an analyst with Morgan Joseph & Co., wrote in a research report yesterday. “The answer is that virtually all casino companies, in this environment, can be had.

“We believe Trump asked an investment bank to value the properties over the summer when speculation surfaced about a potential joint venture with Steve Wynn,” he wrote.

Mr. Wynn has repeatedly declined comment about a potential deal with Mr. Trump.

On Friday, Trump Entertainment shares rose nearly 8 percent on speculation that the casinos are up for sale. They fell 14 cents to $18.05 yesterday on Nasdaq.

As part of a 2004 bankruptcy reorganization, Mr. Trump gave up majority control to his bondholders while still remaining the company’s largest individual stockholder. He declined to be interviewed yesterday.

Mr. Steinberg wrote that Trump Entertainment is the subject of significant speculation, including suggestions of an asset swap of one property for riverboats owned by Penn National Gaming Inc. or Ameristar Casinos Inc.

Trump Entertainment properties include Trump Taj Mahal Casino Resort and Trump Plaza Hotel and Casino, on the Boardwalk in Atlantic City, N.J., and Trump Marina Hotel Casino, in Atlantic City’s Marina District.

Mario Kontomerkos, an analyst with J.P. Morgan Securities, wrote yesterday that the hiring of Merrill Lynch appears to formalize a process that was under way for months at Trump Entertainment.

“We believe every option, including a sale of the company, will be evaluated,” he wrote. “We suspect that prime consideration will be given to alternatives that free up capital currently tied up in Atlantic City assets that can be recycled into other markets like Las Vegas, such as a [joint venture] using Trump’s 13 acres of excess land, or a refinancing.”

He wrote that a sale of the entire company appears less likely owing to tax and debt issues.

Mr. Trump has experienced difficulty in Atlantic City, and his three casinos consistently lose money. In the fourth quarter of 2006, the company lost $9.7 million (31 cents per share).

Trump Plaza and Trump Marina have recently ranked 10th and 11th out of Atlantic City’s 11 casinos in terms of revenue.

The company had struggled for years under the weight of $1.8 billion junk-bond debt, with interest payments eating up most of the cash generated at the slot machines and blackjack tables.

At a time when its competitors were polishing their offerings, the company filed for Chapter 11 bankruptcy in November 2004, suffocated by $1.8 billion in debt that rendered it too cash-poor to maintain, spruce up or expand.

Under the restructuring, the company’s debt was reduced to $1.25 billion. It was the second time in bankruptcy court for the casino company.

Mr. Trump unsuccessfully sought a license to operate a gambling hall in Pennsylvania last year.

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