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It is official: Caesars Entertainmentthe property of the Rio All-Suite Hotel & Casino was sold for $ 516.3 million to the New York-based real estate company Imperial companies, said Monday in a filing with the Securities and Exchange Commission.
"This transaction allows Caesars Entertainment to focus its resources on strengthening our attractive portfolio of newly renovated Strip properties and is expected to result in an increase (cash flow) of these properties," said Caesars Entertainment CEO. Tony Rodio said in a statement announcing the transaction.
"While the WSOP hosting rights will remain with Caesars, there are no answers to any other forward-looking issues relating to Rio or the WSOP."
As part of the transaction, Caesars will continue to operate the casino's non-casino property for at least two years, paying $ 45 million a year in rent under a lease-back lease, according to CDC Game Reports. Rio will also continue to be part of the Caesars Rewards customer loyalty program while Caesars is active and will continue to host the WSOP for the time being.
"The retention of the World Series of Poker and Caesars Rewards customers are all factors that make it a valuable transaction for Caesars," Rodio said in a statement.
The future of the WSOP
The news of the Rio sale seems to be changing a bit for the moment. The WSOP will not change hands under this deal as Caesars retains ownership of the world's most prestigious and oldest poker festival. As reported by PokerNews last week, the deal should not change the long-term location of the World Series of Poker, at least not for 2020. We contacted the WSOP Vice President of Corporate Communications Seth Palansky to confirm.
"The sale of Rio should be finalized by the end of the year," said Palansky. "Caesars will continue to operate Rio for at least two years and will be part of the Caesars Rewards network during this period, and the WSOP will be hosted in Rio in 2020. The WSOP hosting rights will remain with Caesars' responses to other future issues related to Rio or the WSOP. "
"The retention of the World Series of Poker and Caesars Rewards customers are all factors that make it a valuable transaction for Caesars."
the Las Vegas Review-Journal indicated that Imperial Oil would have the option to pay Caesars $ 7 million to "extend the lease on similar terms for a third year." At the request of the buyer, Caesars could continue to manage Rio or provide transition services to Imperial. " What that would mean for the WSOP would be a question for a future date.
Rumors at rest
You may remember that Caesars was acquired in June by Eldorado Resorts Inc., a Reno-based company, in a $ 17.3 billion transaction that allowed for the merger of the two casino brands into one. the largest gaming company in the United States.
This has left rumors about Rio's future property, potential demolitions and the eventual movement of the unresolved World Series of Poker.
The sale of the Brazil-themed hotel-casino was announced in June by the CEO of Eldorado Thomas Reeg when he told investors that he was expecting to sell one or two of Caesars' nine Las Vegas real estate as part of their deal.
"This should reduce the leverage and exposure to the Las Vegas market, declared goals of Eldorado."
The Rio opened in January 1990 west of Caesars Palace and the Las Vegas Strip, and now houses 2,522 suites. In 1998, the property was sold for approximately $ 880 million to Harrah's Entertainment, which will later become Caesars Entertainment. For 15 years, the Rio hosts the WSOP.
Jefferies Game Analyst David Katz called the sale of "positive both strategic and financial" for Caesars and Eldorado, in a note of research addressed to investors, reported by CDC Game Reports. "This should reduce the leverage and exposure to the Las Vegas market, declared goals of Eldorado," Katz said.
The buyer of Rio, Imperial Companies, founded in 2014 by Eric Birnbaum and Michael Fascitelli is "a vertically integrated investment, development and real estate management platform, focused primarily on mixed-use residential assets in all major US markets," according to the website. of the society.
In anticipation of shareholder and regulatory approvals, the sale of Rio should be completed before the planned completion of the Caesars-Eldorado merger scheduled for spring 2020. It seems that rumors about Rio can now be set aside, at least until we pass another. WSOP.
Image courtesy of www.flickr.com/Matt Kieffer
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