“It’s like moving pieces around on a chess board,” was the way one observer characterized the Monday announcement from Caesars Entertainment Corp. (CZR) that it was selling four properties to Caesars Growth Partners (CACQ), its 2013 spinoff.
The deal, worth $2.2 billion, involves Bally’s Las Vegas, the Quad (still under construction on the Las Vegas Strip), the newly-named Cromwell (formerly Bill’s Gamblin’ Hall), and Harrah’s New Orleans. Caesars Entertainment will continue to manage the properties involved.
When CACQ was established, and began trading publicly as a separate company, it was given ownership to Planet Hollywood, Caesars Interactive Entertainment, which included World Series of Poker, and a hotel/casino now under construction in Baltimore, Maryland.
At that time, Gary Loveman, CEO of Caesars Entertainment said the spinoff was being made to help the highly leveraged company restructure its balance sheet. Currently, CZR owes more than $23 billion.
Monday’s announcement carried the same theme.
“Today’s asset sales mark an important step in our ongoing efforts to repair Caesars Entertainment’s balance sheet,” Loveman wrote in a company statement.
CZR owns 58 percent of CACQ and has the rights to acquire the shares it currently does not own at some future date.
The asset sales Monday came with a warning that Caesars Entertainment’s fourth quarter involved a net loss of between $1.7 billion and $1.82 billion. Official fourth quarter results will be released next week.
Ray Poirier is the longtime executive editor at GamingToday.
Contact Ray at [email protected].