Hard Rock International is in deep talks to buy Atlantic City’s troubled Revel Casino, two sources close to the situation told The Post.
The 20-month-old money-losing Revel, which has been through a Chapter 11 bankruptcy reorganization this year, said last month it had hired Moelis & Co. to explore strategic alternatives.
It started looking for a buyer in June, The Post reported exclusively at the time.
Orlando, Fla.-based Hard Rock, whose eight casinos contribute to total corporate revenue of roughly $4 billion, has been looking to establish an Atlantic City presence.
In September 2012, it canceled a $460 million project to build Hard Rock Atlantic City due to poor market conditions.
The deal, if completed, would be a huge relief to New Jersey politicos. The seaside city has suffered from declining revenue for many years because of growing competition. A second casino, the Atlantic Club Casino hotel, the former Hilton, failed to find a buyer after two days of a bankruptcy court auction.
Morgan Stanley took a bath funding the construction of the Revel, and then turned it over to hedge-fund investors, which have been racking up losses.
In total, investors have lost more than $2 billion building and running the casino.
Hard Rock, if it reaches a deal to buy the 1,399-room Revel in the next several weeks, will likely shut it down for a renovation and a Hard Rock re-flagging , according to a source close to the matter.
“They [the hedge funds] are going to take a big haircut,” a source said.
Canyon Capital, Chatham Asset Management and Capital Research and Management in 2011 were among the hedge funds that invested $1.2 billion to finish construction after Morgan Stanley, which lost more than $1 billion, walked away.
While the Hard Rock is the casino most advanced in talks with Revel, others have expressed interest, a source said.
A Hard Rock spokesperson did not return calls.
If New Jersey, as some hope, turns the Meadowlands Racetrack into a Racino, it would likely require any bidder for the operating license to already own a brick and mortar casino in the state, which may have been the spur for Hard Rock to invest in Atlantic City.
Revel, which was built as a resort that happened to have gambling, is showing some signs of progress.
In November, Revel’s revenue gain of $14.5 million amounted to the biggest percentage leap of the city’s 12 casinos; it had $6.2 million in the year-earlier period, when Hurricane Sandy struck.