Caesars Entertainment Corp., one of the world’s most diversified casino-entertainment providers, announced Sept. 23 that it has signed an agreement to sell the Rio All-Suite Hotel & Casino to a company controlled by a principal of Imperial Companies for $516.3 million, which implies a strong sales price to EBITDA multiple.
Under the terms of the agreement, Caesars will continue to operate the property pursuant to a lease for a minimum of two years and pay annualized rent of $45 million. Imperial has the option to pay Caesars $7 million to extend the lease under similar terms for a third year. At the end of the lease term and at the request of the buyer, Caesars may continue to manage Rio or may provide transition services to the buyer.
“This deal allows Caesars Entertainment to focus our resources on strengthening our attractive portfolio of recently renovated Strip properties and is expected to result in incremental EBITDA at those properties,” says Tony Rodio, CEO of Caesars Entertainment. “The retention of the World Series of Poker and retention of Caesars Rewards customers are all factors that make this a valuable transaction for Caesars.”
Caesars Entertainment, formerly Harrah’s Entertainment, purchased the Rio from Las Vegas contractor and casino builder Anthony Marnell in 1998 for about $880 million.
The agreement allows for co-ownership of Rio-specific guest data and places no restrictions on Caesars’ marketing activities. The Rio will continue to be part of the Caesars Rewards network during the lease term, and the transaction is not expected to result in any changes to the guest experience. The World Series of Poker will be hosted at the Rio in 2020 and hosting rights will remain with Caesars Entertainment thereafter.
Further details on the transaction are available in the Form 8-K to be filed with the Securities and Exchange Commission. The transaction is expected to close in the fourth quarter of 2019, subject to regulatory approvals and other customary closing conditions.
Caesars Entertainment is one of the world’s most diversified casino-entertainment providers and the most geographically diverse U.S. casino-entertainment company. Since its beginning in Reno, Nevada, in 1937, Caesars Entertainment has grown through development of new resorts, expansions and acquisitions. Caesars Entertainment’s resorts operate primarily under the Caesars, Harrah’s and Horseshoe brand names. Caesars Entertainment’s portfolio also includes the Caesars Entertainment UK family of casinos. Caesars Entertainment is focused on building loyalty and value with its guests through a unique combination of great service, excellent products, unsurpassed distribution, operational excellence and technology leadership. For more info, visit www.caesars.com/corporate.