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Breakingviews: Caesars' REIT gamble

Friday, November 21, 2014 - 03:29

Reynolds Holding and Quentin Webb discuss the debt-laden casino firm's fight for survival and the pros and cons of putting part of its operating company into a real estate investment trust.

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Caesars Entertainment is in a high stakes battle for its very existence. With some of the best known private equity firms in America involved. Apollo. TPG are heading the list of players. And earlier this month a planned surface to split the casino chains operating company and two. And make one of a rate quite a web a lot of machinations here. Wanted to tell you take us through what's going on exactly say that and sees is is one of the last big LB days from the kind of topped the market day rise. Struggling under a huge debt pile it TPG and appalling idea units have been. Pulling all kinds of tricks wiese is to kind of yeah and I'm yep yep I'm fighting with the dead I think Elliott management is on one side or some data mean there are also lawsuits flying about. Exactly yes that there is different classes of lenders say there is to get an any big deal so right Elliott's and one count there are other people in the kind of more. Virginia campus taking a different position right up front landed us. Dead locked in negotiations and they say that by the end of next here. Dated not going to be going concern and asked to do something about that that's right bankruptcy could be had desperately threat. And Nam okay so now what what about this latest proposal I mean this is kind of creative reits. You know reits are kind of hot. Now does it make sense of this field here. But it isn't this thing I did because this is something that has spread to the gaming industry recently. That there are other companies you've done it with thinking about doing it pinnacle is one. Boy does not I guess the kind of main attraction here is that people. Value reads a lot more highly in the army standards they're letting things and let's just step back from a permitted them in the operating company so one half would operate casinos and the other half but essentially just all of the properties. Because I'm trying to realist and we take kind of guaranteed rents from the operating company so soon. And it's a complicated it's noon wave arranging things and as I said my peace takes a long time to. Source time that the tells IRS to be you know on board which is not necessarily it's at a big guys and you know I'm in Alice in iris looking at these kids because vehicle mix of course this is the kind of you know very tax efficient ways to structure yourself fans. But that that there are other kind of operating benefits to say theoretically. You know the money some states where you're only allowed one casino license tonight. If you have these two companies perhaps wanted to get one licensing election get another Satan. Theoretically you could run the scene is that that I should stress this is just to propel his life and he came up and a funny way right it is disclosed. Earlier this month and now they're saying what wow that's been superseded by other things where where things stand as best you can tell what what happens is there in the East Point and negotiations that lenders in the land of the parents buying. Agreements not to talk about what's going on which mean they can't trade that that so it. If they wanna get our face the company has to make public what they've been talking mats and these people no longer inclined to China's wolves this today this place this and said actually this is already an outdated idea of Sudanese. It's being superseded when it. Kind of thrashing at new ideas for that service Watson and trusting a story will be following that one as well as others in the meantime stay tuned for more breaking news. Next week.

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Breakingviews: Caesars' REIT gamble

Friday, November 21, 2014 - 03:29