The bankrupt Fontainebleau Las Vegas casino resort, which was earlier to be purchased by Penn National Gaming Inc., will now be auctioned, and the opening bidder for this auction will be billionaire investor Carl Icahn.A bidding war was triggered by Icahn Nevada Gaming LLC yesterday in court that led to its so-called stalking-horse offer of $156.5 million, including debtor-in possession financing of $51.5 million.

The bid by Icahn sets the minimum for others to beat. The 63- story Fontainebleau, which is nearly 70% complete, is located on about 27 acres at the north end of the Las Vegas Strip. Priced at $2 billion when it filed for bankruptcy in June, Fontainebleau will cost about $1.5 billion to finish.
Wyomissing, Pennsylvania-based Penn National Gaming, after first offering $101.5 million, stopped bidding at $145 million, including $50 million in debtor-in-possession financing.

U.S. Bankruptcy Judge A. Jay Cristol was asked by Fontainebleau’s sellers last week in Miami to auction the casino on 21st January. As per the loan offer by Penn, the money was supposed to be used to stabilize Fontainebleau’s buildings, which are partly exposed.

In order to fulfill Chief Executive Officer Peter Carlino’s goal of owning a casino on the Las Vegas Strip, Penn planned to finish Fontainebleau with an unidentified partner. He also intended to utilize the company’s database of regional U.S. casino customers to lure gamblers to a Las Vegas resort.

No comments could be received from Icahn and Penn spokesman Joe Jaffoni.