It was a clean sweep of Nevada regulators for Apollo Global Management in achieving the goal of being approved to operate the Venetian and Palazzo on the Las Vegas Strip. Two weeks ago, the Nevada Gaming Control Board give the deal its unanimous blessing and last week the state Gaming Commission followed suit with four of the five members giving their blessing—the fifth recused herself because her law firm had some business with the parties involved.
All the regulators chose to take the word of Apollo that the former chairman, and still majority shareholder at over 11 percent, Leon Black would not hold any roll that may influence the company. He was ousted as chairman last year, and replaced by his hand-picked successor Marc Rowan. Black has admitted to paying the notorious Jeffery Epstein more than $150 million for “financial advice,” and to paying a former mistress more than $100,000 a month to keep quiet, and who has filed suit against Black. He is also reportedly under investigation by the Manhattan District Attorney for an alleged sexual assault at his home, but no charges have yet been filed.
Commissioner Oganna Brown asked about the investigation and a AGM executive said although they were not privy to what’s going on in the DA’s office, “we’re not aware of any criminal investigation of Mr. Black at any prosecutor’s office.”
The commissioners tried to insert a condition in the approval that AGM would immediately notify the board if Black attempted to influence the company or place someone on the board who is beholden to Black.
The commissioners also took AGM’s word that its previous management of Caesars Entertainment that led to a complicated bankruptcy was caused by the recession.
AGM executive David Sambur, who engineered the Caesars deal, said the Black incident has caused the company to change its corporate structure.
“First and foremost,” he said, “Apollo changed its stock classification to go to a one share, one vote structure. Prior to this episode, I believe that three founders of the firm had additional voting rights beyond just their economic rights.”
“The second change is that now Apollo has a fully independent board of directors,” consisting of 18 members, “and insiders constitute a minority.”
As for the financing of the deal, Sambur assured regulators that it is different than the Caesars deal, which brought along with it $25.6 billion in debt, of which more than $16 billion was eliminated prior to the buyout by Eldorado Resorts.
The $6.25 billion deal—AGM paid $2.25 billion for the management and the gaming REIT VICI, paid $4 billion for the real estate—should close sometime this week. Sambur said the current management, led by General Manager George Markantonis, would remain in place, and that AGM would consider restarting work on the unfinished St. Regis condominiums on the property which halted work in 2008.
