Caesars Entertainment Corporation has found a buyer that will take the Harrah’s St. Louis casino off of their hands. In a statement released by Caesars, the company announced that it had signed a definitive agreement to sell Harrah’s St. Louis to Penn National Gaming, Inc. for an amount of $610 million in cash.
The transaction, which is still subject to regulatory approvals, is expected to close in the second half of 2012 and will be looked at as an asset transaction that allows Penn National Gaming to take advantage of certain tax benefits. Once the sale is finalized, Penn National Gaming is expected to rebrand the casino, dropping the Harrah’s name and changing it to something more akin to the company’s Hollywood theme.
With Harrah’s St. Louis now off their hands, Gary Loveman, chairman, president and chief executive officer of Caesars Entertainment, thanked their employees for their service and dedication. “Harrah’s St. Louis is a quality property with a talented team,” he said. “We are grateful to our colleagues in St. Louis for their commitment to providing excellent service to our customers.”
The decision to sell Harrah’s came after Caesars Entertainment, once known as Harrah’s Entertainment, struggled to stay financially afloat after private-equity firms TPG Inc. and Apollo Management LP took its predecessor company private through a $27.8 billion buyout in 2008. Despite Caesars’ continued struggle in getting out of the red, the sale of Harrah’s St. Louis to Penn National Gaming opens a new business chapter for the company to find new investment opportunities in new markets that offer the potential for high returns.
“The sale of this property exemplifies our strategy to maximize returns from our mix of assets through investments in new markets as well as occasional divestitures,” Loveman said.
“We are committed to expanding our distribution network into growth markets that have the potential for high returns.”