NEW YORK — Icahn Enterprises, a holding company run by billionaire Carl Icahn, has sold an unfinished hotel and casino formerly known as the Fontainebleau in Las Vegas for $600 million to an affiliate of The Witkoff Group LLC and New Valley LLC.
The mammoth unfinished Fountainebleau hotel is 68 stories tall with blue windows and is located on the Las Vegas strip at 2755 Las Vegas Blvd. The property first began construction in 2007 before filing for bankruptcy in 2009. Icahn Enterprises acquired the Fontainebleau for a price of $148 million in February 2010.
Carl C. Icahn, Chairman of IEP, said: “We are pleased to announce the sale of the Fontainebleau, which was one of Icahn Enterprise’s hidden gems carried at $143 million on our balance sheet and in our statement of indicative net asset value as of June 30, 2017. IEP acquired this asset when others were unwilling to invest, and the sale has resulted in a gain of approximately $457 million for our unit holders. This successful investment is an example of our “contrarian” modus operandi, which seeks to invest in undervalued assets and businesses, nurture, guide and improve their condition and operations, and ultimately sell them for large gains. This is our second significant transaction this year, as we previously disclosed the sale of American Railcar Leasing LLC in June, which resulted in a gain of approximately $1.521 billion for our unit holders.”
Icahn Enterprises L.P. (NASDAQ:IEP), a master limited partnership, is a diversified holding company engaged in ten primary business segments: Investment, Automotive, Energy, Metals, Railcar, Gaming, Mining, Food Packaging, Real Estate and Home Fashion.
Privately-held Witkoff is based in NY and hasn’t revealed what it plans to do with the Vegas site. Witkoff spent four months conducting its due diligence on the resort and market prior to the acquisition, and said it has identified numerous ways to unlock the significant underlying value of the property to generate strong returns for its business and the Las Vegas community.
“2755 Las Vegas Boulevard South is one of the best physical assets in the country, which is one of the reasons we were attracted to it,” said Steve Witkoff, Chairman and Chief Executive Officer of Witkoff. “Furthermore, the resort is ideally located on the Las Vegas Strip, directly across from the Las Vegas Convention Center, which is in the midst of a $1.4 billion expansion and renovation. At the basis, we acquired a well-designed, structurally sound integrated resort at a significant discount to both replacement cost and the implied public market valuations of comparable Las Vegas Strip resorts. We look forward to applying our industry-leading value-enhancing platform to this property to unlock its true growth potential.”
Mr. Witkoff continued, “Las Vegas is one of the strongest lodging markets in the country given its highly favorable dynamics.”