The 2019 trend of consolidations and mergers could be set to continue into the new year, with media outlets reporting that Penn National Gaming could be set to offload its Las Vegas-based Tropicana asset.
First reported by Vital Vegas, Penn National, which also counts Las Vegas’ M Resort Spa Casino as part of its stable, could be set to recoup as much as $700m from the potential sale.
Taking a chunk out of long-term debt in the region of $11bn, the anticipated sale price, which Vital Vegas sources say is well underway with an offer already accepted, represents a significant increase from the $360m price agreed almost four years ago with Tropicana shareholders, the largest of which is a partnership between Onex and Alex Yemenidjian.
Boasting a 50,000 square foot casino with over 1,000 gaming positions and a sportsbook, the property also boasts 1,500 guest rooms and in excess of 100,000 square feet of exhibition space.
Continuing the latest trend of US organisations monetising land-based assets, this follows MGM Resorts International maintaining its asset-light strategy, designed to focus on core business as well as maximising value for its shareholders.
This saw the firm offload the real estate assets of the Bellagio to Blackstone for $4.25bn, with an affiliate of Treasure Island owner Phil Ruffin also recently securing the $825m purchase of Circus Circus Las Vegas.
Last year following the sale of the Rio All-Suite Hotel and Casino by Caesars Entertainment to a company controlled by a principal of Imperial Companies, analysts of investment bank Union Gaming stated that the deal could spike a flurry of activity in Las Vegas.
“In spite of the uptick in recent M&A activity over the past two years, there still could be up to four or five more potential Las Vegas asset sales within the next 12 months,” stated John DeCree, analyst at Union Gaming.