Caesars Sells Harrah’s Las Vegas for $1.14 Billion

 Caesars Sells Harrah’s Las Vegas for $1.14 Billion

Caesars Entertainment Corporation has announced that it has entered into an agreement to sell Harrah’s Las Vegas to VICI Properties for $ 1.14 billion. If this sounds rather shocking, you may be relieved to know (or not really care, as the case may be) that it is all part of a plan.

In mid-November, Caesars announced that it will acquire Centaur Holdings, LLC for $ 1.7 billion in cash. Centaur owns Hoosier Park Racing and Casino in Anderson, Indiana and the Indiana Grand Racing and Casino in Shelbyville, Indiana. The sale of Harrah’s Las Vegas is being used to finance the Centaur deal.

It will also continue to be business as usual at Harrah’s, as Caesars will enter into a 15-year lease for the property, paying VICI an initial annual rent of $ 87.4 million, a number which will increase as the years go on. Caesars will continue to operate Harrah’s. When the lease term is up, Caesars will be able to extend the lease for up to 20 years in four five-year extensions.

On top of that, Caesars is acquiring an 18.4 acre plot of land adjacent to Harrah’s from VICI on which it plans to build a 300,000 square foot convention center. The development “is expected to feature the largest column-free ballroom in the United States and to be outfitted with state-of-the-art technology.”

“The transactions we are announcing today demonstrate our commitment to pursuing growth opportunities while maintaining balance-sheet discipline,” said Mark Frissora, President and Chief Executive Officer of Caesars Entertainment, in a press release. “We expect the sale and leaseback of Harrah’s Las Vegas will allow us to acquire Centaur and develop the convention center without increasing leverage. The sale and leaseback transaction is our first post-emergence transaction with VICI and maintains Harrah’s Las Vegas’ connectivity to our network, which will create value and provide benefits to our guests. The acquisition of the adjacent land and development of the convention center allows us to develop another important destination right in the middle of our center-Strip footprint.”

That center-strip footprint includes, from north to south on the east side of the Las Vegas Strip: Harrah’s, Linq, Flamingo, Cromwell, Bally’s, Paris, and Planet Hollywood. Caesars Palace is across the street from Harrah’s. The company also owns the Rio just off the Strip, which is the home of the World Series of Poker.

The deal stipulates that once the convention center is completed, Caesars can actually require VICI buy the property and lease it back to Caesars, like it is doing with Harrah’s. If Caesars does not exercise that option, VICI can decide for itself if it wants to do it, anyway.

The post Caesars Sells Harrah’s Las Vegas for $ 1.14 Billion appeared first on Poker News Daily.

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