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Caesars and Vici Offload Bossier City Racino to Rubico Acquisition Corp for $22m
By Jeff Osienya Sep 08, 2020 IndustryCaesars officially let’s go of its Bossier City Racino property to Rubico Acquisition Corp in a $22 million deal. More divestments to occur in the next few months as the company continues to fulfill the terms of its merger.Caesars Entertainment, the recently merged gaming conglomerate, and Vici Properties, a real estate investment trust firm have announced their definitive arrangement to sell Harrah’s Louisiana Downs Casino, Racing, and Entertainment to Rubico Acquisition Corp. for $22 million.
Vici is a Real Estate Investment Trust (REIT) that was created by Caesars Entertainment back in the fall of 2017 when Caesars faced a long and incredibly complicated bankruptcy process. As part of the terms of this trust, Vici currently owns several Caesars’ casinos across the United States including the iconic Caesars Palace, and the REIT then leases back the properties to Caesars for use.
The proceeds of this transaction will see Caesars get $16.5 million and the remaining $5.5 million will go to Vici properties, subject to the usual adjustments involved in cash and net working capital. And as part of the agreement, both Caesars and Vici announced that the yearly based rent payments that fall under the Regional Master Lease between the two companies will stay intact. Subject to standard regulatory approvals and other closing conditions, the transaction is projected to have been finalized by the end of this year or early next year.
Harrah’s Louisiana Downs property which sits at 8000 E. Texas St. in Bossier City, La., resumed operations at 25% capacity after pandemic induced shutdowns on 18th May, together with the Horseshoe Bossier City which is also owned by Caesars. The property which has been operating will now change ownership after this sale.
Caesars to Offload More Properties in the Coming Months
This deal marks the first sale that is part of the divestment plan that was agreed upon as one of the conditions for approval for the Eldorado-Caesars $17.3 billion tie-up to abide by anti-monopolistic policies in different states. As such, Caesars with thus continue to get rid of some of its assets in the coming months, with the sale of some properties already announced and the deals waiting to be closed.
In April, the merged company disclosed that it would be selling Eldorado’s Shreveport property along with Montbleu Resort, Casino and Spa in Lake Tahoe as well as Caesars’ Bally’s Atlantic City Hotel and Casino to Twin River Worldwide Holdings. In total, Twin River will have to part with a cool $155 million to acquire several gaming and recreational properties from Eldorado. By the end of 2020, it is expected that the sale of Bally’s will have been completed in a $25 million transaction.
Incidentally, much earlier in the year, even before the Coronavirus pandemic hit the gaming world, Caesars and Vici were already selling. In January, the two let go of their Harrah’s Reno Hotel and Casino and sold it to an affiliate of CAI Investments LLC.
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