Casino operator Caesars Entertainment, Inc. and real estate investment trust VICI Properties this week announced that they would offload Harrah’s Louisiana Downs Casino, Racing & Entertainment from their portfolio of properties in a $22 million deal.
Rubico Acquisition Corp. has agreed to purchase the racing and casino complex located in Bossier City, Louisiana.
Caesars said that the proceeds of the transaction would be split $5.5 million to VICI and $16.5 million to Caesars itself, subject to customary adjustments for cash and net working capital. The two companies also announced that the annual base rent payments under the Regional Master Lease between them would remain unchanged.
VICI is the real estate investment trust (REIT) that spun off from the old Caesars in the fall of 2017 when the company had just emerged from a lengthy and complex bankruptcy. The REIT owns a slew of Caesars-operated casinos across the US, including the iconic Caesars Palace, and leases them to Caesars.
The sale of Harrah’s Louisiana Downs is expected to close in late 2020 or early 2021, subject to regulatory approvals and other customary closing conditions.
The sale of the Bossier City racino is the first asset divestment announced by Caesars since Eldorado Resorts finalized its $17.3 billion tie-up with larger rival Caesars Entertainment Corp. in late July. The combined group took the Caesars name as the more popular of the two brands.
Caesars Set to Offload One More Louisiana Property
Harrah’s Louisiana Downs is not the only property that Caesars is set to sell in the coming months. Eldorado previously announced that it would offload its Eldorado Resort Casino in Shreveport to Twin River Worldwide Holdings as part of a larger deal that includes two other properties in different states.
That deal too is subject to regulatory approvals and other customary closing conditions and is expected to be finalized by the first half of 2021.
Once the sale of Eldorado Resort Casino and Harrah’s Louisiana Downs close, Caesars will be operating 50 properties across 16 states. And its portfolio in Louisiana will be reduced to four properties from six.
It should be noted that Caesars has been on an asset disposal spree in the months leading up to the combination of Eldorado and the old Caesars. It was in fact in April when the two companies announced that they would sell Eldorado’s Shreveport property and its Montbleu Resort, Casino and Spa in Lake Tahoe, Nevada as well as Caesars’ Bally’s Atlantic City Hotel & Casino to Twin River.
The sale of Eldorado’s properties is expected to close sometime in the first half of 2021 and Twin River has agreed to pay $155 million for these. The company is set to finalize the purchase of Bally’s by the end of the year and to pay $25 million for that casino resort.
Regulators in several states asked Caesars and Eldorado to offload casinos to prevent competition problems once their combination was finalized.
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