The Caesars Entertainment Corporation said on Monday that it would sell four casinos to its spinoff, Caesars Growth Partners, for $2.2 billion.
The casinos - Bally’s Las Vegas, the Cromwell, the Quad and Harrah’s New Orleans - will change hands in a deal intended to help Caesars Entertainment gain access to cash it needs to service its huge debt load.
Until recently, both Caesars Entertainment and Caesars Growth Partners made up Harrah’s, the casino giant that was taken private in 2008 by the private equity firms Apollo Global Management and TPG Capital.
The $30 billion leveraged buyout of Harrah’s was among the largest ever so-called club deals, involving two firms teaming up to buy a huge target, and came just before the financial crisis hit, depriving Las Vegas and casinos around the country of visitors.
Caesars Entertainment relisted in 2012, and last year it spun off Caesars Growth Partners in a bid to give the parent more financial flexibility. But Apollo and TPG are still working their way out of one of the largest private equity deals ever.
Caesars Entertainment still owns a majority of Caesars Growth Partners, and the deal was approved by special committees of both boards made up of independent directors.
“Since being taken private near the beginning of the global financial crisis, we have faced an incredibly challenging business environment and a highly leveraged capital structure,†said Gary W. Loveman, chief executive of Caesars Entertainment. “Despite these obstacles, we have invested significantly in the growth of our network and the enhancement of our assets while concurrently deploying a wide array of financial and operational tools to manage the company’s capital structure and create value.â€
