- Caesars still considering noncore asset sales
- Deals could be harder to come by this year
Caesars Entertainment (NASDAQ: CZR) indicated it remains open to selling noncore assets, including casinos, as it continues debt-reduction efforts, but warned transactions could be harder to come by this year than in 2024.
The company delivered fourth-quarter results, noting the sales of the World Series of Poker (WSOP) and the LINQ Promenade on the Las Vegas Strip last year helped it reduce debt by $500 million. At the end of 2024, the gaming operator had $12.3 billion in outstanding liabilities, $866 million in cash and cash equivalents, and $150 million in restricted cash.
Our 2024 refinancings have positioned the company to benefit from significant reductions in cash interest expense in 2025 and have extended our closest maturity to 2027,” said CFO Bret Yunker in a statement.
He added that Caesars bought back $50 million worth of its shares during the last three months of 2024, bringing its tally for the year to $190 million. That buyback activity was financed with cash from asset sales.
Speaking of Caesars Asset Sales …
On a conference call with analysts, CEO Tom Reeg reiterated the view that the company is open to selling noncore casinos and that related inquiries have picked up, but that has yet to result in deal-making.
We’re in active dialogue kind of around this stuff all the time,” Reeg said in response to a question from Jefferies analyst David Katz. “I would say since [the] fourth quarter, we’ve seen an increase in incoming calls in terms of somebody saying, ‘hey, what about this asset?’ ‘What about that asset?’ I wouldn’t tell you that that’s transitioned into any particular trades that I think are imminent or even highly likely.”
The Caesars CEO added that the uptick in questions about company assets that could be up for sale follows an extended period in which there weren’t many of those inquiries, adding that the recent activity on that front “is a step in the right direction.”
No Clear Indicators About What Caesars Could Sell
Reeg didn’t delve into specifics regarding what properties Caesars considers “noncore, nonoperating casinos,” leaving the guessing game up to analysts, investors, and, yes, reporters.
In terms of reducing debt, selling one of its Las Vegas Strip casino hotels and/or the related real estate would be the most effective tool for Caesars. Speculation swirled around the Flamingo more than two years ago, but a transaction didn’t materialize because that venue needs enhancing, and prospective buyers worried about customer retention if the property were to be removed from the Caesars Rewards program.
Another possibility is the divestment of regional casinos that Caesars views as lagging or those in markets in which the company runs multiple gaming venues, but Reeg didn’t comment to that effect on Tuesday evening’s conference call.
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