Treasure Island wants Caesars’ Strip properties
A Las Vegas casino company has jumped in and announced that it wants the properties help by Caesars Entertainment along the Las Vegas Strip, should the company decide to make a deal. Treasure Island would welcome the opportunity to purchase the properties from Caesars as the company potentially looks to sell its assets, although it’s unclear whether or not the company’s properties would be sold only as a single unit, or if it would break apart the portfolio.
Carl Icahn, who recently became the largest shareholder of Caesars, is leading the charge for the company to find a new owner. He became the largest shareholder to make that goal happen and there is already interest from other casino operations, such as Golden Nugget and its owner, Tilman Fertitta.
Treasure Island wants to get its hands on Caesars Palace, the iconic Caesars property, along with Harrah’s and Paris and a few others under the company’s control. The company’s CEO, Phil Ruffin, says that Caesars has “great locations” and is willing to spend up to $1 billion in cash for the Strip properties. He added that he would take on debt if necessary to consummate a deal. Ruffin indicated that Treasure Island currently has no debt, giving it easy access to lines of credit.
The executive points out that the Strip properties that average between $200 million and $300 million each year in cash flow are of higher interest. Analysts assert that Strip venues should be able to sell for ten times their annual cash flow amount, which means Ruffin needs to be prepared to cough up a considerably higher amount if he wants to be taken seriously.
Ruffin’s net worth is around $3 billion, so he has the capability to extend himself. He has already proven capable of making timely and lucrative deals to purchase other casinos on the strip. He purchased the New Frontier Hotel for about $165 million in 1997 and sold it ten years later for $1.2 billion. He was able to unload it just prior to global recession that was particularly hard on casinos and real estate in Nevada.
A year later, he purchased Treasure Island from MGM Resorts for $775 million. That transaction allowed MGM to stay afloat and not succumb to the financial hardships that resulted from the recession a year earlier.
The post Treasure Island wants Caesars’ Strip properties appeared first on CalvinAyre.com.
Source: Treasure Island wants Caesars’ Strip properties