Please ensure Javascript is enabled for purposes of website accessibility

Another Sale for Caesars

By Jeff Hwang – Updated Nov 16, 2016 at 4:35PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Caesars to sell Bally's New Orleans to Columbia Sussex.

Friday night, Caesars Entertainment (NYSE:CZR) announced an agreement to sell Bally's Casino New Orleans to an affiliate of privately held hotel operator Columbia Sussex for approximately $24 million. This marks the second in what is expected to be a series of asset sales related to the pending merger between Caesars and acquirer Harrah's Entertainment (NYSE:HET).

As in the first sale announced last month, Caesars is not giving up much. Bally's New Orleans is by far the last-place player in the New Orleans market, which consists of Harrah's land-based casino and three riverboats. As it is, Harrah's generates more action than the three riverboats combined.

Also similar to last month's deal, the Bally's New Orleans sale comes with a somewhat familiar partner: Harrah's sold its Vicksburg, Miss., property to Columbia Sussex last year.

New Orleans Gaming Market
Casino Revenues*
Harrah's (HET) $310.0M
Boomtown (PNK) 117.9M
Treasure Chest 111.0M
Bally's (CZR) 60.1M
*Last 12 months

The companies expect the transaction to close by the end of Q2 2005. Caesars doesn't expect to report either a material gain or a loss on the deal.

In July, in response to the previous month's merger agreement between Las Vegas Strip giants MGM Mirage (NYSE:MGG) and Mandalay Resort Group (NYSE:MBG), (see Mandalay Says "I Do" and The Logic of MGM/Mandalay), Harrah's and Caesars announced their own deal to create the world's largest casino operator (see No Quick Win in Casino Merger). Combined, Harrah's and Caesars own more than 50 casinos across dozens of gaming markets, but with considerable overlap. To ease trade concerns, the two companies have moved quickly to sell off assets.

Last month, Harrah's and Caesars announced the sale of four properties to an affiliate of Colony Capital for $1.24 billion (see Harrah's/Caesars Expects Payoff and Smooth Sale for Harrah's?). Both companies announced third-quarter earnings last week (see Vegas, Horseshoe Boost Harrah's and Looking Up at Caesars).

Fool contributor Jeff Hwang owns none of the companies mentioned above.

None

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
339%
 
S&P 500 Returns
109%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/24/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.