Las Vegas Sun

July 16, 2019

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The Strip:

TI owner Phil Ruffin interested in buying the right Caesars property

Phil Ruffin

Steve Marcus

Treasure Island owner Phil Ruffin is pictured in his office on Feb. 2, 2016.

Treasure Island owner Phil Ruffin said he’d be interested in buying another Strip casino if a Caesars property becomes available in the company's just-announced merger with Eldorado Resorts.

Eldorado said Monday it was buying Caesars in a $17.3 billion cash-and-stock deal that would create the largest gambling operator in the United States. The company also said it was possible it would sell off a Strip resort.

“I can say we’d be very interested in a Strip property that’s not part of a REIT (real estate investment trust),” Ruffin said. “We wouldn’t be interested in the Rio, but we’d be interested in something on the Strip if something were to be available.”

A REIT owns and often operates income-producing real estate such as office buildings, shopping centers and resorts, allowing individuals to invest in real estate.

Eldorado CEO Tom Reeg, who spoke during a conference call with reporters Monday morning, said the merger will create “more Strip exposure than we would need.”

“You can see the map where there might be some overlap, and we might have an asset that could be a candidate for sale,” Reeg said. “I don’t want to talk about any specifics, but I would expect that we’d be a seller of a Strip asset.”

Caesars resorts on the Strip are: Bally’s, Caesars Palace, the Cromwell, the Flamingo, Harrah’s, the Linq, Paris Las Vegas and Planet Hollywood. Only Caesars Palace and Harrah's are REIT properties. The company also owns the Rio, which is just off the Strip on Flamingo Road.

Reeg said any sales decisions will be made as the merger, which still needs approval from regulators and shareholders, moves closer to an anticipated closing date in the first half of next year.

John DeCree, an equity research analyst with Union Gaming Group, said it seems likely some Strip real estate will eventually change hands.

“Right now, we’re looking at the surface of what was presented,” DeCree said. “With a transaction of this size, there’s a lot more to the story that just hasn’t unfolded yet. If you just think about economics, the valuation you could get for a Las Vegas casino can be significant. There’s a finite amount of real estate available on the Las Vegas Strip.”

Reeg said it was understood during the lead-up to the agreement that Caesars was talking to other potential suitors.

Ruffin said he wasn’t interested in purchasing Caesars because it would have been too big of an undertaking for his taste.

“It wasn’t a financial decision,” Ruffin said. “(Caesars) would have been a monster to handle. I like to have more of a hands-on approach with my properties.”

The acquisition, which had been rumored for weeks and was pushed by activist investor Carl Icahn, will put about 60 casino-resorts in 16 states under the Caesars name.

Eldorado will pay $8.40 per share in cash and 0.0899 shares of Eldorado stock for each Caesars share, or $12.75 per share. The transaction values Caesars at about $8.6 billion, and Eldorado will pick up about $8.8 billion of Caesars debt.

Shareholders of Eldorado will hold about 51% of the company’s outstanding stock, with Caesars shareholders holding the remaining and 49%.

The Associated Press contributed to this report.