It appears that the Las Vegas Hard Rock Hotel & Casino has been sold by owner Peter Morton for US$770 million in cash. Opened in 1995, the property will now belong to Morgans Hotel Group (MHG), which already partners Boyd Gaming in its Strip casino complex Echelon Place scheduled to be completed in 2010. It also appears that the UK’s Rank Group, which owns the other Hard Rock locations, was an unsuccessful bidder for the Las Vegas property.

For the time being the resort will be operated under the Hard Rock brand, but a condominium project for the site was abandoned in February and is unlikely to be resurrected. The Hard Rock brand is marketed to appeal to the younger sector of gamblers. W. Edward Scheetz, President and Chief Executive Officer of MHG, stated, "We are excited about adding the Hard Rock Hotel & Casino to our portfolio. Since Las Vegas is the largest hotel market in the U.S., it is key for our growth strategy. This transaction provides us with an immediate and highly-visible entry into this market."

MHG may bring in one or more joint venture partners to share in the investment in the existing assets. Although the Company may use some of the excess land for expansion, it is also considering selling or establishing a joint venture partnership to develop a significant portion of it. It is anticipated that the casino will be leased to a third-party licensed operator. The acquisition will be financed with cash on hand and MHG's corporate line of credit, as well as a $700 million credit facility from an affiliate of Credit Suisse. The transaction is subject to applicable regulatory approvals and other conditions, and is expected to close no later than the first quarter of 2007. (E-05.12.06)

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