In advance of its planned merger with Eldorado Resorts Incorporated and American casino operator, Caesars Entertainment Corporation, has reportedly signed a deal that is to see it offload its Rio All-Suite Hotel and Casino property in southern Nevada for $516.3 million.
According to a Monday report from the Las Vegas Review-Journal newspaper, the casino firm agreed the sale with New York-based real estate firm Imperial Companies and is now due to pay an annual fee of $45 million in order to lease back the 2,500-room venue for the next two years.
The newspaper reported that the arrangement also contains a provision that would enable Las Vegas-headquartered Caesars Entertainment Corporation to extend this lease-back arrangement for a third year and, at the request of Imperial Companies, supply a range of operational and transitional services in exchange for a fee of $7 million.
Caesars is currently in the process of merging with regional counterpart Eldorado Resorts Incorporated as part of a $17.3 billion alliance that is due to create the largest casino firm in the United States with a portfolio of over 70 properties. Although the combined entity is set to retain the Caesars name, competition concerns have reportedly obliged the firm to consider selling off some of its nine Las Vegas venues, which moreover encompass Bally’s Las Vegas, Caesars Palace Las Vegas and Harrah’s Las Vegas.
Tony Rodio, Chief Executive Officer for Caesars Entertainment Corporation, told the Las Vegas Review-Journal that the sale of the Rio All-Suite Hotel and Casino, which is expected to close by the end of March, will permit his firm ‘to focus our resources on strengthening our attractive portfolio of recently-renovated Strip properties’ and is likely to lead to ‘incremental cashflow at those properties.’
Rodio reportedly told the newspaper…
“The retention of the World Series of Poker (WSOP) and the retention of Caesars Rewards customers are all factors that make this a valuable transaction for Caesars Entertainment Corporation.”