May10
Tropicana Close to Becoming First Las Vegas 2020 Property for Sale
January 11, 2020 TamaraTam
Last year seemed to be more than a stable period for casino mergers and acquisitions. Some of the recently sold venues were Eldorado and Ceasars. All of these deals were just the beginning of sales which will occur during 2020. The most recent news comes from Penn National which considers the offers for its popular Tropicana Las Vegas venue.
Details about the offer
According to the report of Vital Vegas, the sale of Tropicana is “imminent.” Despite receiving unsolicited bids this past year, Penn National didn’t express readiness to sign the agreement. If Vital Vegas assertions are true, the company showed interest in one of the bids and could accept it very soon.
The expected value of the deal stands at over $700 million. Having into consideration that Penn National paid about $360 million for the purchase of Onex Corp five years ago, it seems to be a favorable return on investment (ROI). This amount will also Penn in covering the present debt which amounts to $11 billion.
It is also important to mention that the Penn National deal will be one of the sensitive agreements in the gaming sector. It means that we won’t get any news or confirmation from the operator. One of the reputable gaming providers, Casino. Org tried to get some information regarding the future deal. However, Penn National SVP for Public Affairs Eric Schippers noticed:
“Unfortunately, we are unable to comment on rumors or market speculation.”
About Return on Investment
If we take into ROI, it depends on increases in standard annual valuation. It is expected that this year brings better results in Las Vegas including rapid growth in activity.
On this occasion, gaming attorney Frank Schreck observed:
“I’m more optimistic about 2020 than I was when I talked about 2017, 2018 and 2019. It seems like 2017 was starting to come back to normal, 2018 improved some more, and 2019 was back to the 2007 level.”
At the moment, LVBP is held by Las Vegas Review Journal while the latter is owned by Sheldon Adelson – the man behind Las Vegas Sands. This connection has been denied by Sheldon’s attorneys. Not only Schreck expressed a positive opinion about the future growth of Las Vegas venues but also Nevada Gaming Control Board analyst, Michael Lawton, believes in a better future of the city. According to his estimation, gross gaming revenue in the city will increase by 1.5% until the end of 2020.
Source:
“Tropicana could become the first Vegas property of 2020 to be sold“, Erik Gibbs, calvinayre.com, January 3, 2020.
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