No bites yet
Caesars Entertainment Inc. is looking to sell its Flamingo Casino for a price tag of over $1bn, per sources close to Bloomberg.
interest has dwindled because of the necessary renovations
No potential buyers have emerged from private deliberations regarding the sale. The casino has been offered to private firms and other agencies, but interest has dwindled because of the necessary renovations.
Caesars has been attempting to liquidate one of its Las Vegas properties to help reduce its outstanding debt. The Flamingo has been in operation since 1946 and is one of the most recognizable attractions on the strip.
Problems selling the Flamingo
Experts project the Flamingo will lose a lot of business when separated from Caesars because patrons would lose access to the Caesars Rewards loyalty program.
The one-billion-plus-dollar price tag is also quite hefty, and that does not include other changes needed to modernize the casino. With projects such as the $3bn overhaul South of the Las Vegas Strip, companies may be hesitant to take on a property with which they have not been involved and cannot immediately redesign as their own.
The grandiose buyout also eliminates most prospective buyers, only allowing for a sale to a true market giant. So, instead of starting a bidding war, the opposite effect may be in play as companies wait out Caesars until the figure drops.
History of the Flamingo
The Flamingo originally opened for the price of $6m under the command of gangster Bugsy Siegel. Today, it has 3,450 rooms, two pools, a fitness center, a spa and salon, and valet parking.
$13.5bn in first-quarter debt
Caesars’ decision to offload the famed resort is a result of $13.5bn in first-quarter debt. The company has been seeking the sale since early in the year and expects to complete the process by mid-summer, as reported by Chief Executive officer Tom Reeg.
“When you get a lot of lawyers involved, the work extends to whatever the maximum allowable deadline is,” Reeg said. “So if we finish one day ahead of that six months, I’d be very pleased.”
Vici Properties Inc., which owns several Caesars properties, can refuse the sale of the Flamingo, making the process more difficult.
The company also considered selling Planet Hollywood, but opted to keep it to continue using its theater.