Treasure Island's Phil Ruffin Shows Interest in Caesars’ Las Vegas Strip Properties

Caesars Entertainment assets have been the most wanted properties in the iGaming industry, as a multitude of sides has shown interest in buying those. However, some gigantic operators such as Boyd Gaming, Eldorado Resorts are pretty silent about their final decision…

…while Treasure Island’s owner, Phil Ruffin, is increasingly interested in getting his hands on the brand. The entire complex includes several venues such as Caesars Palace, Harrah’s and Paris and several more.

Raise Even More in Debt if Necessary

Ruffin, 84-year old businessman pointed out that his interest in the gargantuan corporation is so strong that he’s more than ready to raise the debt, if necessary, in order to become the owner. He already has $1bn in cash, and as he added:

“They have some great locations and we would have a strong interest. We don’t have any debt and so we could borrow a lot of money if we found the right deal.”

By “a lot of money,” he meant an amount equal to about six times the asset’s cash flow. Despite the fact that Caesars’ stock went down by 20 percent over the past year, the spokesperson for the company refused to give any comment on Ruffin’s (more than generous) offer.

Boyd and Eldorado Still Patient

Boyd’s CEO, Keith Smith, declared that his corporation is interested in the Strip, but didn’t say anything about Caesars. As he said:

“If there is an asset on the Strip that becomes available, that’s priced right, that is additive to the portfolio, that can generate a return, then we’ll execute on it.”

On the other hand, Thomas Reeg, Eldorado Resorts’ CEO was relatively unspecific about what the company’s actual plans are. Commenting on the insinuations regarding a merger with Caesars, he said that:

“We read the same newspapers that you read, so we read the same rumors about what we might or might not be doing. We’re not going to comment on any particular potential transaction.

Ruffin’s a Strong Player

Though the large operators are obviously capable of offering a higher price compared to an individual (Ruffin in this case), he shouldn’t be discounted in any case. According to Forbes, this real estate developer, whose net worth is about $3bn is well-known for…

…his timely acquisitions of Strip venues. In 1997, the magnate snapped up the New Frontier Hotel for about $165 million and just a decade later, sold it for a jaw-dropping $1.2 billion. The next year, the Great Financial Crisis struck Las Vegas and during the harsh period…

…Ruffin was one of the few individuals with heaps of cash on hand. He made another wise purchase from MGM Resorts International in Dec. 2008. By paying $775 million, he became the Treasure Island owner. Besides this, he also owns 50 percent of Trump International in Las Vegas.

Potential Buyers Beware

As Ruffin announced, the potential buyers would have to evaluate Caesars’ future cash flows very carefully. The reason for this is that the highly demanding loyalty program and large client database, which would be quite challenging to maintain. In addition to this…

…he pointed out he has no interest in buying any off-Strip properties, nor in The Cosmopolitan. According to Bloomberg, the Blackstone investment firm is willing to sell for as much as $4bn, which Ruffin sees as too high. He believes the company cannot get more than $3 bn for the luxury Strip resort. The businessman also pointed out that he did not believe MGM or Caesars would buy The Cosmopolitan either, due to their own financial turbulence.

Source:

“Treasure Island Owner eyeing Caesars’ Las Vegas Strip Properties”, Prince Todd, reviewjournal.com, May 3, 2019.