Caesars Growth Partners To Buy $2.2 Bln Of Assets From Caesars Entertainment

(RTTNews) - Caesars Acquisition Co. (CACQ) announced that Caesars Growth Partners LLC has entered into a definitive agreement to buy Bally's Las Vegas, The Cromwell (formerly Bill's Gamblin' Hall & Saloon), The Quad Resort & Casino and Harrah's New Orleans from Caesars Entertainment Corp. (CZR) for $2.2 billion including assumed debt of $185 million and committed project capital expenditures of $223 million, resulting in cash consideration of approximately $1.8 billion.

The transaction has been unanimously recommended by independent special committees of the boards of directors of Caesars Acquisition, the managing member of Growth Partners, and Caesars Entertainment and approved by the boards of both companies.

The transaction is expected to close in the second quarter of 2014, subject to certain closing conditions, including the receipt of required regulatory approvals.

The transaction will facilitate new investment in these properties, some of which require considerable capital expenditures to realize their full potential.

In addition, Growth Partners will retain a 50% interest in the management fee revenues to be received by certain subsidiaries of Caesars Entertainment Operating Company, Inc., a wholly-owned subsidiary of Caesars Entertainment, in connection with the management of Bally's Las Vegas, The Cromwell, The Quad (formerly Imperial Palace) and Harrah's New Orleans. With this transaction, CAC is also announcing a $223 million renovation of The Quad.

The transformation of The Quad will create a new design-inspired urban hotel combining boutique sensibilities with full scale resort amenities.

Guest room renovations will begin in the coming weeks when three of the resort's towers will close to accommodate remodeling. The resort's public spaces will remain open throughout the duration of the construction period with maximum precautions taken to minimize disruption to guests. The hotel and casino's full transformation is expected to be completed in the first half of 2015.

Separately, Caesars Entertainment announced preliminary results for the fourth quarter of 2013 that include consolidated results for Caesars Growth Partners. The company expects to report its financial results for the quarter and full-year ended December 31, 2013 in March.

Caesars Entertainment currently expects consolidated net revenue to be in the range of approximately $2.050 billion to $2.110 billion and that its Adjusted EBITDA will be in the range of approximately $395 million to $415 million for the fourth-quarter ended December 31, 2013. Estimated net loss attributable to Caesars Entertainment for the quarter ended December 31, 2013 is expected to range between $1.700 billion and $1.820 billion, compared to net loss attributable to Caesars Entertainment of $480.3 million for the quarter ended December 31, 2012. Analysts polled by Thomson Reuters expect the company to report revenues of $2.12 billion for the fourth-quarter. Analysts' estimates typically exclude special items.