August 22, 2007

Turbulent Market Even Effecting Hooters

We always love a good story about Hooters.

The proposed sale of Hooters Hotel is being slowed by the turbulent debt market, according to the developer who has an agreement to purchase the property.

Richard Bosworth of Hedwigs Las Vegas Top Tier said the investment group is still working to buy the off-Strip hotel-casino for approximately $235 million, $95 million cash plus the assumption of debt.

However, he said, the volatile credit market has caused Hedwigs to re-evaluate some financing options tied to the deal.

"The capital market condition is out of our control," Bosworth said. "It doesn't put the deal at risk. It changes the pricing, some of the financial analytics of the deal."

Bosworth is president of a Santa Monica, Calif.-based advisory firm NTH Advisory Group, which jointly owns Hedwigs with a private equity investor he declined to identify.

"It is a very challenging time in the debt markets," said Mike Hessling, president of 155 East Tropicana, Hooters' parent company.

Hessling said during a second-quarter earnings call that he has not yet heard whether Hedwigs has obtained financing for the deal.

Speculation surrounding the Hooters sale comes a week after the neighboring Tropicana postponed a $2.5 billion redevelopment project at the 34.5-acre property, citing a recent downturn in the credit market.