Caesars Eyeing Las Vegas Strip Asset Sale in Early 2022, Says CEO Tom Reeg

Long-running scuttlebutt regarding when Caesars Entertainment (NASDAQ:CZR) will sell a belongings on the Las Vegas Strip could morph from tattle to realness ahead of time next year.

Amid a snow flurry of mellow profile Strip asset sales this year, including the Venetian and Sands Convention Center inward March and the Cosmopolitan inwards September, speculation intensified regarding when Caesars would divest i of its Sin City properties. Previously, the manipulator said such a dealing would non come until next year, and that’s the timeline it’s sticking to.

We also believe this is an opportune clip to execute on our strategy of a strip show asset sale. So you should wait us to set that inwards motility inward the early piece of ’22,” said CEO Tom Reeg on the company’s third-quarter earnings group discussion telephone call on Tuesday.

Reeg didn’t particularise which unity of the operator’s octonary Sin City venues could live on the sale block. The other from that group — Caesars Palace — is owned by VICI Properties (NYSE:VICI).

Sale Could Fetch Premium Price

The comparisons aren’t apples-to-apples, but recent Las Vegas gaming belongings transactions provide some guide for realistic damage ranges on a Caesars’ asset sale. Additionally, the manipulator has scarcity note value on its side.

“Now we’ve got a caterpillar tread register that we can point in time to in terms of what the belongings can buoy generate, and the playing theatre has been cleared with the Cosmo and Aria trades, to where we should feature a pretty robust — we should coming upon pretty robust demands for a nerve center slip asset that, frankly, may live 1 of the last ones to swop for quite a some time,” said Reeg.

In July, MGM Resorts International (NYSE:MGM) sold the attribute assets of Aria and Vdara to private equity loyal Blackstone (NYSE:BX) for $3.89 1000000000000 in cash in in a sale-leaseback transaction. Reeg didn’t say if Caesars is considering a sale-leaseback or a traditional divestment.

But he notes, “We’d expect to sell a single dimension and live done.”

Following the 2020 takeover past Eldorado Resorts that created “new Caesars,” conjecture swirled regarding which of its Las Vegas properties Caesars could portion with. Planet Hollywood and French capital were often the epicenters of those rumors.

In a trade struck with VICI on the twenty-four hours it announced its offering for Caesars inwards June 2019, Eldorado granted the landlord rights of firstly refusal on Flamingo Las Vegas, Bally’s Las Vegas, French capital Las Vegas, and Planet Hollywood. Those rights reach out to a indorse possible deal, which would include the rest of that radical — assuming I sales event pact is reached — and the LINQ Hotel & Casino.

Caesars Property Sale: Big Cash Booster

Combine a Las Vegas sales event with incoming immediate payment from the cut-rate sale of William Hill’s international assets, paring of the NeoGames (NASDAQ:NGMS) stake, and increasingly robust cash in flowing from its land-based casinos, and Caesars could feature “well inwards nimiety of $5 one thousand million of cash to deploy inwards 2022,” said Reeg.

Not surprisingly, some of that uppercase will live spent on iGaming and sports wagering. Those segments hold long been viewed as catalysts for Caesars stock, and Reeg sees the digital business organization turning positive on the base of earnings before interest, taxes, depreciation and amortisation (EBITDA) past the bug out of the 2023 football game season.

However, Reeg adds, “The vast bulk of that hard cash is sledding to go to pay knock down debt.” Caesars is aiming to lose weight its yearly interestingness expenses to $300 meg to $400 meg below where those costs were when the Eldorado takeover was finalized.

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