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Best of Howard Stutz

Gaming Guru

Howard Stutz
 

Declined Option Clears Way for Casino Sale

24 January 2005

Park Cattle Co., the company that owns the land housing Caesars Tahoe, said Friday it wouldn't exercise an option to purchase the casino's 27.2-acre site, which is across from the shore from South Lake Tahoe. The decision paves the way for the property to be sold to Kentucky-based Columbia Sussex Corp. for $45 million.

The proposed sale, first announced in November, is expected to close by the end of June pending regulatory approval, a statement by Caesars Entertainment said.

The company also hopes to complete its planned $9.4 billion deal to be bought by Harrah's Entertainment around the same time.

The sale of Caesars Tahoe, which has 440 rooms and a 40,000-square-foot casino, would give Columbia Sussex two of the five casinos in the Stateline area of Lake Tahoe. The company already operates the Horizon while Harrah's operates the other three casinos: Harrah's Lake Tahoe, Harvey's and Bill's Casino.

Caesars had previously announced plans in October to sell its Bally's Casino New Orleans to Columbia Sussex for $24 million.

In September, Harrah's and Caesars said Colony Capital had agreed to purchase four properties: Harrah's East Chicago, Harrah's Tunica (Miss.), Atlantic City Hilton and Bally's Tunica (Miss.) for $1.2 billion.

The transactions are part of a paring down by both Caesars and Harrah's in preparation for the pending buyout, which would form the gaming industry's largest casino operator. When the merger transaction was announced in July, the companies operated 56 casinos nationwide.

Earlier this week, the companies announced jointly that they had substantially complied with a Federal Trade Commission request for additional information surrounding the agreement. An FTC spokesman said that if the companies have certified all the additional information covering various antitrust concerns, government regulators would have 30 days to approve the transaction.

In addition to federal regulators, shareholders of both companies and state regulators where Harrah's and Caesars operate casinos must approve the transaction before it can close.

Friday's announcement came after the stock market closed. Caesars closed Friday at $19.63, down 4 cents, or 0.2 percent.

Columbia Sussex, which has several affiliates, operates 64 hotels, resorts and casinos in 28 states and overseas. In Nevada, in addition to the Horizon, the company operates the Westin Casuarina in Las Vegas and recently bought the River Palms Casino in Laughlin.