Treasure Island expresses interest in purchasing some Caesars properties
If Caesars decides to begin unloading casinos, several companies are already in line
Carl Icahn wanted Caesars to be sold, so he did what any billionaire investor would do. He purchased enough shares in the company to take a majority position and began changing around the board in order to find people that would agree with him. His efforts are reportedly paying off and Caesars is most likely going to be sold before the end of the summer. What still isn’t known is whether or not it will offer pieces of the company’s portfolio or expect someone to come in and buy the whole thing. There are already several casino operators who have voiced their opinion about wanting to acquire the company and a new one has now jumped in.
Treasure Island and CEO Phil Ruffin want the properties Caesars owns on the Las Vegas Strip, but apparently only these properties. Ruffin has his eyes on Harrah’s, Paris and the iconic Caesars Palace, as well as others, and has said that he would pay $1 billion in cash to acquire them and is willing to take on debt in order to pay more if necessary.
It’s going to be necessary. The average cash flow of a Strip property ranges between $200 and $300 million. According to analysts, a property’s value, at the time of a sale, is typically worth around ten times its annual average cash flow. That would make Caesars Palace alone worth $2 billion if Caesars held to the formula.
Ruffin is worth around $3 billion and Treasure Island has no debt. This puts him in a great position to be able to negotiate deals and seek financing to make acquisitions.