Advertisement

Eldorado Resorts to sell 2 properties in preparation of Caesars deal

Bookmark this
July 12, 2019 By Bailey Schulz

Eldorado Resorts announced the sale of two regional properties, a move investors say will help the casino company gear up for its pending acquisition of Caesars Entertainment Corp. slated to close next year.

Reno-based Eldorado announced Thursday morning it has agreed to sell a property in Kansas City, Missouri, and one in Vicksburg, Mississippi to Rhode Island-based Twin River Worldwide Holdings Inc. for $230 million in cash.

“The sale is relatively small compared to the ($17.3 billion) acquisition of Caesars, but it does help free up some balance sheet capacity to help finance the larger acquisition,” said Union Gaming analyst John DeCree.

Impact on Caesars acquisition

The sales of Isle of Capri Casino Kansas City and Lady Luck Casino Vicksburg are expected to close early next year.

Twin River has plans to “substantially reposition” the casino in Kansas City, according to a statement from the company. It has already released renderings for concepts of how it can redevelop the riverboat casino.

“We believe these assets are a great fit for our portfolio,” Twin River President and CEO George Papanier said in a statement from the company.

The sales play into Eldorado’s strategy to cut out smaller assets; the company sold three regional properties last month for $385 million.

“The intention here is to accomplish two things,” Jefferies analyst David Katz said. “One, to focus on areas that would overlap with Caesars, and two, to pursue transactions that would reduce the profile and leverage as much as they can prior to the deal closing.”

The multibillion-dollar deal between Caesars and Eldorado would create the largest casino company by U.S. gaming assets, and the Federal Trade Commission may require the company to divest some of its properties. The sale of the Mississippi and Missouri properties likely eases FTC concerns in the Kansas City area, according to a Deutsche Bank report led by analyst Carlo Santarelli.

But even with the Twin River transaction, Eldorado would have around 60 assets after the Caesars acquisition.

Stifel analyst Brad Boyer expects Eldorado to continue to sell properties in other markets. For example, Eldorado and Caesars each own three properties in Louisiana.

An Eldorado spokeswoman declined to comment.

Katz said the two companies may also look to sell closer to home, and a Caesars property on the Las Vegas Strip could be on the chopping block.

“I don’t know which one, but it would be a lot of Las Vegas concentration … lot of concentration in Reno, the Tahoe area,” Katz said.

Twin River growth

SunTrust Robinson Humphrey analyst Barry Jonas said in a report that Twin River’s purchase is a “nice diversification move” and plays into its merger and acquisition strategy. He has previously told the Las Vegas Review-Journal that Twin River could be a potential buyer of a Caesars property on the Strip.

But such a purchase would require the company to partner with a real estate investment trust, something Twin River “has expressed some hesitancy” toward in the past, Jonas said in the report.

DeCree said he doesn’t expect Twin River to be interested in pursuing a Strip casino, but he said the company could be looking to buy more regional assets.

A spokeswoman for Twin River declined to comment.

Caesars stock fell 1.1 percent to $11.85 a share Thursday. Eldorado shares fell 3.8 percent to $45.54. Twin River shares fell 4.6 percent to $27.37.


Recent Articles

Slots player at Las Vegas airport wins more than $300K

Slots player at Las Vegas airport wins more than $300K

in News

Ryan C. of Columbus, Ohio, won more than $300,000 on a Wheel of Fortune progressive machine Monday night at McCarran International Airport, airport spokeswoman Christine Crews said.

November 21, 2019 By Tony Garcia

CD Young's Karate in Henderson - Vegas Born From Family and Leadership

CD Young's Karate in Henderson - Vegas Born From Family and Leadership

in Sponsored Content, Best Of News

In 2008, CD Young took a leadership class at Disneyland where he was asked to draw out his dream on a piece of paper. He drew a picture of his future karate studio.

November 19, 2019 By CD Young's Karate

Las Vegas gets $3.8M donation for self-driving vehicle plans, more

Las Vegas gets $3.8M donation for self-driving vehicle plans, more

in Future Las Vegas

Cisco has donated more than $3.8 million worth of equipment and professional services to the city of Las Vegas for transportation initiatives expected to support self-driving vehicle technology and improve roadway safety.

November 19, 2019 By Shea Johnson

The Palms’ first 18 years, its colorful history — PHOTOS

The Palms’ first 18 years, its colorful history — PHOTOS

in News

From its gala opening on Nov. 15, 2001, the Palms has been a bit different from its Las Vegas brethren.

November 19, 2019 By John Przybys

Advertisement

Must Read Articles

Barx Parx creating lasting impact on the dog community

Barx Parx creating lasting impact on the dog community

in Sponsored Content, Best Of News

Barx Parx is more than a doggy daycare, but also a destination. They offer kennel-free puppy sleepovers, training and event rentals for nearly any party dog owners can think of to celebrate their four-legged friends.

November 8, 2019 By Barx Parx

Get Locked Down in Vegas' #1 Escape Room

Get Locked Down in Vegas' #1 Escape Room

in Sponsored Content, Best Of News

It’s not just about solving the problems in one hour or less, but testing the visitors problem-solving skills, mental finesse and intelligence.

October 31, 2019 By Lockdown Escape Rooms

The Photo Guys are keeping Las Vegas schools smiling

The Photo Guys are keeping Las Vegas schools smiling

in Sponsored Content, Best Of News

Getting a kid to smile isn't always easy. The Photo Guys create a fun, safe environment so kids can feel comfortable and be themselves.

November 7, 2019 By The Photo Guys

Advertisement