In an effort to free up cash, Caesars Entertainment has joined the list of Las Vegas gaming giants selling off properties. First, MGM Resorts unloaded the Bellagio in a deal to rent the property back. It was announced last week by a source close to PlaySlots4RealMoney.com of a similar sale by Caesars Entertainment.
How Much Does Caesars Entertainment Sell The Rio All Suite Hotel For?
This gaming company just completed the sale of the Rio All Suite Hotel and Casino for more than $516 million. The deal had been in the works for awhile before closing early this month. An official press release mentioned Dreamscape Companies as the buyer. This company is owned and operated by Eric Birnbaum. Mr. Birnbaum is the co-founder of Imperial Companies. Furthermore, this is a real estate firm. On December 8, we told readers how the glitzy Las Strip and old-school Vegas On Freemont Street are Contributing to a strong economy in Las Vegas.
Under the terms of the sale agreement, Caesars will continue to operate the Rio for the next two years. The rental cost is $45 million a year. This agreement could be extended past the current two-year window. Dreamscape has the option to extend the lease to a third year for $7 million. There is also the possibility of Caesars managing the property past the two-year lease. The company could also be a part of the transition over to Dreamscape.
Caesars also paid $40 million to help facilitate the sale through financing. This figure was reported in a filing with the Securities and Exchange Commission.
The terms also covered the Caesars Reward Program at the Rio. It will be continued for players during the entire term of the lease. Also covered was the immediate future of the World Series of Poker. This major poker event will stay at the Rio in 2020. Nothing was mentioned where this event might take place the following year.
Caesars Entertainment owns and operates Caesars Palace, Harrah’s and Bally’s in Las Vegas. This is just a part of its holdings that span across the country and reach around the globe.
Other Las Vegas properties in this group include:
- The Cromwell
- Flamingo Las Vegas
- The Linq
- Paris Las Vegas
- Planet Hollywood Las Vegas
Back in mid-November, Caesars shareholders approved the pending company merger with Eldorado Resorts. This deal was officially announced in June of this year, pending approval. It was reported that 87% of Eldorado shareholders approved the deal. Caesars’ numbers were a bit lower with 76% of shareholders giving their approval.
It is expected to take until June of 2020 for everything be finalized. The deal was valued at $17.3 billion. It still needs regulatory approval as part of the process.
Rumors of the plan to sell the Rio go as far back as 2005. As part of the deal with Eldorado, there is a concerted effort to slim down Caesars’ overall portfolio. Another property mentioned in possible sales talks is Planet Hollywood.
The general trend towards selling off stand-alone properties by gaming giants should continue into 2020. Freeing up cash for other projects as well as enhancing stock price appears to be the common bond.
• Source: Caesars completes sale of Rio Hotel Casino for $516 million From news3lv.com On December 5, 2019.