New York-listed casino operator Caesars Entertainment has agreed a deal to sell the Rio All-Suite Hotel & Casino to a principal of Imperial Companies for $516.3m
The transaction is expected to close in the fourth quarter of 2019, subject to regulatory approvals and other customary closing conditions.
Under the agreement, Caesars will continue to operate the hotel for a minimum of two years and pay $45m in rent annually, with the buyer having the option to extend the lease for a third year at a price of $7m. At the end of the lease term and at the request of the buyer, Caesars may either continue to manage the Rio or provide transition services.
"This deal allows Caesars Entertainment to focus our resources on strengthening our attractive portfolio of recently renovated Strip properties and is expected to result in incremental EBITDA at those properties," said Caesars Entertainment CEO Tony Rodio. "The retention of the World Series of Poker and retention of Caesars Rewards customers are all factors that make this a valuable transaction for Caesars."
The agreement allows for co-ownership of Rio-specific guest data and places no restrictions on Caesars' marketing activities. It also allows Rio to continue as a member of the Caesars Rewards programme during the lease term, and for the World Series of Poker to be hosted at the Rio in 2020, after which hosting rights will remain with Caesars Entertainment.
Shares in Caesars Entertainment Inc. (NSQ:CZR) closed in New York Tuesday down 1.01 per cent at $11.73 per share, less than 5 per cent off their 52-week high of $12.23 per share set on July 5th.