Greek Gambling Reform Coming to a Dead End [...]
Caesars Gets $4 Billion Bids from Interested Parties for Interactive Entertainment
- May 16, 2016 By Oliver Young -
Well known casino operator Caesars Entertainment, which has been struggling with debts, is considering to sale its interactive unit which is one of the departments of the Caesars group that makes a lot of money.
According to reports, Caesars Acquisition Co. has received many unsolicited bids with a value of up to $4 billion from interested parties that want to buy Caesars Interactive Entertainment Inc. This unit includes a generous social gaming department, the World Series of Poker brand and a real money online gambling destination which isn’t very successful.
Even though there is no official announcement from the company, it seems that they hired the large bank Raine Group LLC to help evaluate the offers. However, no formal sale process is ongoing and there is no guarantee that the interactive unit will be sold.
An Attractive Acquisition Target
Caesars Growth Partners is the owner of Caesars Acquisition Co. In turn, the former company is owned by the big Caesars Entertainment Corp. The highly profitable Caesars Interactive Entertainment is owned by Caesars Acquisition Co. and this branch from the Caesars family tree is one of the biggest online, mobile and social gaming companies in the world with yearly sales of approximately $800 million. In fact, in the first quarter of the year, the interactive unit recorded a 28.8 percent increase in revenue.
This makes Caesars Interactive Entertainment a very attractive acquisition target having in mind its capacity to generate a lot of money compared to its competition. However, there is the problem with the owner which is currently a subject of several lawsuits.
The interactive unit started with operations in 2009. In 2011, the parent company bought Slotomania from the previous owners Playtika for $100 million. This social casino style gaming destination currently comprises over 97 percent of the yearly revenue of Caesars Interactive. The social casino games at Slotomania are not played with real money but players can pay with real cash for a number of exclusive benefits. In addition, the entity also manages the World Series of Poker which is the largest and most popular poker series tournament in the world taking place once a year in Las Vegas.
A Very Complicated Situation
If Caesars Interactive Entertainment is sold it could further damage the negative relationship between the company and creditors which has resulted in an $18 billion bankruptcy court case lasting for more than a year. The case involves the main operational unit of the big gambling operator.
This ongoing dispute between Caesars and the creditors has caused important industry and financial parties to go against each other. According to creditors, the company had moved valuable assets with the interactive unit and several brick and mortar casino establishments being among those out of the creditor’s reach.