LAS VEGAS & RENO, Nev. - Caesars (NASDAQ:CZR) Entertainment, Inc. (NASDAQ: CZR), a leading casino-entertainment provider, has entered into an agreement to divest the LINQ Promenade for $275 million. The buyer is a joint venture that will be formed by TPG Real Estate and Acadia Realty (NYSE:AKR) Trust's Investment Management Platform.
The transaction is expected to reach completion in the fourth quarter of 2024, pending standard approvals and closing conditions. The LINQ Promenade has been a part of Caesars' portfolio for over a decade, and this sale marks a strategic move to streamline the company's assets and advance its debt reduction objectives.
Tom Reeg, CEO of Caesars Entertainment, expressed gratitude to the LINQ Promenade team members and tenants for their collaboration over the years and conveyed his best wishes for their future endeavors.
The legal firms Latham & Watkins LLP and Brownstein Hyatt Farber and Schreck, LLP represented Caesars in the transaction, while Kirkland & Ellis LLP provided counsel to TPG & Acadia.
Caesars Entertainment, which originated in Reno, Nevada, in 1937, has grown significantly over the years. The company operates under well-known brand names such as Caesars®, Harrah's®, Horseshoe®, and Eldorado®. It offers a diverse range of gaming, entertainment, and hospitality services, as well as mobile and online gaming and sports betting experiences linked to the Caesars Rewards loyalty program.
The information about this agreement is based on a press release statement, which includes forward-looking statements regarding market performance and operational timelines. These statements are based on current expectations and involve risks and uncertainties that could cause actual results to differ materially.
Caesars Entertainment has not provided further guidance on the potential impact of this transaction on its market performance or operations beyond the statements in the press release.
In other recent news, Caesars Entertainment Corporation reported an unexpected loss in the third quarter. The company posted a loss of 4 cents per share, a stark contrast to the anticipated profit of 12 cents per share as projected by analysts using LSEG data. Revenue for the quarter ending September 30 also decreased by 4% to $2.87 billion, falling short of the expected $2.92 billion.
Increased competition and construction-related disruptions in regional markets were cited as the primary reasons for the shortfall. The company's regional segment sales declined by 7.6% to $1.45 billion, impacted by the competitive pressures and construction disruptions at its New Orleans property.
Despite these challenges, the Caesars Digital segment set a new quarterly record for Adjusted EBITDA at $52 million, driven by over 40% growth in net revenues. The company also recently closed on a new $1.1 billion senior unsecured refinancing, setting the stage for potential interest expense savings in 2025. These are among the recent developments as Caesars continues to navigate a challenging market landscape.
InvestingPro Insights
The recent sale of the LINQ Promenade by Caesars Entertainment (NASDAQ: CZR) for $275 million aligns with the company's strategic focus on debt reduction and asset optimization. This move comes at a time when Caesars faces some financial challenges, as highlighted by several InvestingPro metrics and tips.
According to InvestingPro data, Caesars Entertainment has a market capitalization of $9.79 billion, with a revenue of $11.39 billion in the last twelve months as of Q2 2024. However, the company's profitability is currently under pressure. An InvestingPro Tip indicates that Caesars is not profitable over the last twelve months, with a negative P/E ratio of -34.95.
The decision to sell the LINQ Promenade may be partly driven by the company's financial position. Another InvestingPro Tip reveals that Caesars' short-term obligations exceed its liquid assets, suggesting a need for improved liquidity. The proceeds from this sale could help address this balance sheet concern.
Despite these challenges, Caesars has shown strong recent performance in the market. The company has delivered a robust return over the last three months, with a price total return of 24.67% during this period. This positive momentum might indicate investor confidence in the company's strategic decisions, such as the LINQ Promenade divestiture.
For investors seeking a more comprehensive analysis, InvestingPro offers additional insights with 8 more tips available for Caesars Entertainment. These tips could provide valuable context for understanding the company's financial health and future prospects in light of this recent transaction.
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