Caesars Entertainment Corporation(NASDAQ:CZR) reported the sale of the Rio All-Suite Hotel & Casino to principal of Imperial Companies for $516.3 million.
Under the terms of the agreement, Caesars will continue to operate the property pursuant to a lease for a minimum of two years and pay annualized rent of $45 million. The buyer has the option to pay Caesars $7 million to extend the lease under similar terms for a third year. At the end of the lease term and at the request of the buyer, Caesars may continue to manage Rio or may provide transition services to the buyer.
Said CEO Tony Rodio, "This deal allows Caesars Entertainment to focus our resources on strengthening our attractive portfolio of recently renovated Strip properties and is expected to result in incremental EBITDA at those properties.
"The retention of the World Series of Poker and retention of Caesars Rewards customers are all factors that make this a valuable transaction for Caesars."
The agreement allows for co-ownership of Rio-specific guest data and places no restrictions on Caesars' marketing activities. The Rio will continue to be part of the Caesars Rewards network during the lease term, and the transaction is not expected to result in any changes to the guest experience.
The World Series of Poker will be hosted at the Rio in 2020 and hosting rights will remain with Caesars Entertainment thereafter.
Shares in CZR gained eight cents to $11.98
