Caesars Entertainment’s plan to sell the Flamingo Las Vegas Hotel & Casino might be on hold.
The company’s original plan was to get a sale done by the end of summer. As we approach the end of September, no announcement on the potential $1 billion sale of the Las Vegas Strip property has been made. However, experts believe Caesars could extend the deal to a later date.
Caesars missing its summer deadline for sale
Earlier this month, during Caesars Entertainment’s Q2-earnings call, CEO Tom Reeg pointed to a hard summer deadline for the sale of the Flamingo.
“It’s very clear the timeline that is laid out in the VICI documents that govern this. So we launched early this year, the deadline is by the end of the summer. And every deadline I’ve ever seen in a land deal, the work goes into that deadline,” he said.
Shedding debt with selling of Flamingo
Selling the Flamingo would help Caesars shed some of its $15.5 billion debt. However, Reeg said selling the property was not a necessity.
“For us — there are plenty of interested parties. Obviously, the financing environment is what it is. And if that’s going to impact what someone will pay, there is a level where we’re not going to chase it. I’m very happy to just clip the free cash flow and come back later,” Reeg said.
Caesars has said on multiple occasions it believes it owns too many rooms on the Las Vegas Strip, and selling the Flamingo would allow it to raise rates at its other properties. Unfortunately, the Flamingo has not received as much capital investment as some of Caesars Entertainment’s other casinos.
“When I first started talking about selling our Vegas Strip asset, the response from full sell-side and buy-side was why would you want to sell the Vegas Strip asset?” Reeg said.
“There are times in the market that — we wouldn’t want to have owned this many rooms. And now the conversations have turned to, oh my god, can you get this done?”