Planet Hollywood Sale Rumors Swirling, Suitor List Could Be Long
Posted on: February 8, 2021, 04:33h.
Last updated on: February 9, 2021, 08:18h.
A well-known Las Vegas insider says rumors are floating around regarding Caesars Entertainment (NASDAQ:CZR) potentially selling Planet Hollywood on the Strip.
In a post earlier this afternoon, Vital Vegas notes a sale of the venue could be announced over the near-term. But the blog points out the chatter is unconfirmed.
Rumors about a potential sale of Planet Hollywood have circulated for some time now. But a source who asked to stay anonymous says he was recently laid off and an impending sale was given as the reason,” according to Vital Vegas.
Planet Hollywood, as it’s known today, opened in 2007. From 1962 to 1997, it was the Aladdin. In 1998, it was demolished to make way for a revamped Aladdin. The new version opened two years later, but scuffled and was sold in 2003. Prior to merging with Caesars, Harrah’s acquired the venue in 2010, paying $70 for $306 million worth of the previous owners’ debt.
Why Planet Hollywood Rumor Has Credibility
“New Caesars” is the $17.3 billion marriage between that company and Eldorado Resorts, the latter being the buyer. That management team runs the gaming giant today, and it’s searching for cost efficiencies. Analysts believe that, if properly executed, the combined company could save $1 billion, and that divestments are part of that equation.
That’s one reason the Planet Hollywood rumor has viability. The second reason is that Eldorado management said prior to the merger being completed that it could sell one or two of Caesars’ Strip venues. Finally, the speculation could morph into hard news because Planet Hollywood is one of the properties at the center of an agreement stemming from the acquisition of Caesars.
In an agreement struck with gaming real estate investment trust (REIT) VICI Properties (NYSE:VICI) on the day it announced its offer for Caesars in June 2019, Eldorado granted the landlord rights of first refusal on Flamingo Las Vegas, Bally’s Las Vegas, Paris Las Vegas, and Planet Hollywood. Those rights extend to a second possible deal, which would include the remainder of that group — assuming one sale pact is reached — and the LINQ Hotel & Casino.
VICI, which counts Caesars at its largest tenant, owns the real estate assets of Caesars Palace and Harrah’s on the Strip.
Potential Suitor List
As Vital Vegas points out, Hard Rock International, the gaming and hospitality company owned by the Seminole Tribe of Florida, could mull a deal for Planet Hollywood. The tribal gaming giant was recently connected to rumors regarding a sale of Sands Convention Center, The Venetian and The Palazzo. But Las Vegas Sands (NYSE:LVS) hasn’t yet made a formal announcement pertaining to those properties.
Given the cache associated with operating a Strip casino, Caesars will likely find plenty of interested parties, assuming it proceeds with putting Planet Hollywood on the block and if VICI takes a pass.
Flush with cash, any number of private equity firms could get into the mix, either for the real estate, the gaming operations, or both.
Among domestic gaming companies that lack Strip footprints but have the ability to orchestrate this type of deal, Bally’s Corp. (NYSE:BALY) comes to mind. That operator has a penchant for acquisitions, currently has no Las Vegas exposure, has previously bought venues from Caesars, and its largest shareholder — hedge fund Standard General — could perhaps finance a Planet Hollywood purchase.
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