Long siege on the Strip

In one of the more improbable but optimistic auguries the North Strip has seen, a private equity fund is trying to pry land away from Archon Corp. For the past 10 months, Esplanade Capital has been laying siege to Archon, bombarding it with press releases and trawling for disgruntled shareholders.

Last March, Esplanade offered $17.50/share — a 62% markup — for Archon stock. No sale. The offer was upped again in June. Nothing doing. Earlier this month, Esplanade made a $19.25/share offer, a bid that it shared with the media by means of a letter to Archon Secretary Sue Lowden. (Remember her?) Its motivation? “The rapidly approaching sale of the Gaithersburg Maryland property for $76.3 million expected to close no later than April 30, 2014.” Esplanade is also swooning over the goofy All Net Arena & Resort proposed for Archon’s old Wet ‘n Wild acreage. Esplanade boasts of a silent partner “who has built an impeccable track record of several billion dollars worth of real estate acquisitions, restructurings, and recapitalizations over the past three decades.” Further escalating the rhetoric, Esplanade President Shawn Kravetz says Archon “seems to be run as the personal fiefdom of Mr. Paul Lowden and not for the benefit of all shareholders given the series of related party transactions between the Company and the Lowden family, the Company ‘going dark’ in 2011, and the galling lack of responsiveness to our requests as a concerned shareholder. We remind the Board that it has fiduciary duties to all shareholders and not just to Paul Lowden and his family.”

With a theatrical flourish of despair, Kravetz concludes, “While we would prefer to negotiate an acquisition privately, the Company’s response so far indicates that the Board prefers to do otherwise. Accordingly, we are concurrently releasing this letter to the public in perhaps the vain hope that we will finally receive a serious response to our offer.” I wouldn’t hold my breath.