LAS VEGAS, March 3, 2014 /PRNewswire/ -- Caesars Acquisition Company (NASDAQ: CACQ) ("CAC") today announced that Caesars Growth Partners, LLC ("Growth Partners") has entered into a definitive agreement to acquire Bally's Las Vegas, The Cromwell (formerly Bill's Gamblin' Hall & Saloon), The Quad Resort & Casino ("The Quad") and Harrah's New Orleans from Caesars Entertainment Corporation (NASDAQ: CZR) ("Caesars Entertainment") for $2.2 billion including assumed debt of $185 million and committed project capital expenditures of $223 million, resulting in cash consideration of approximately $1.8 billion. The transaction has been unanimously recommended by independent special committees of the boards of directors of CAC, the managing member of Growth Partners, and Caesars Entertainment and approved by the boards of both companies. The transaction is expected to close in the second quarter of 2014, subject to certain closing conditions, including the receipt of required regulatory approvals.
The transaction will facilitate new investment in these properties, some of which require considerable capital expenditures to realize their full potential. In addition, Growth Partners will retain a 50% interest in the management fee revenues to be received by certain subsidiaries of Caesars Entertainment Operating Company, Inc., a wholly-owned subsidiary of Caesars Entertainment, in connection with the management of Bally's Las Vegas, The Cromwell, The Quad (formerly Imperial Palace) and Harrah's New Orleans. With this transaction, CAC is also announcing a $223 million renovation of The Quad.
"The acquisition of these assets further aligns Growth Partners' portfolio with attractive markets, especially Las Vegas," said Mitch Garber, chief executive officer of CAC. "Growth Partners is focused on acquiring and developing high-growth operating assets with strong value creation potential. These four properties will strongly complement our existing portfolio, particularly Planet Hollywood and our interest in Horseshoe Baltimore, which will open later this year. All of these properties will continue to benefit from participation in the Total Rewards network."
The three Las Vegas properties in the transaction are strategically and geographically desirable, occupying space at the very heart of the Las Vegas Strip. The Cromwell will open later this year as the only standalone boutique hotel and casino on the Las Vegas Strip boasting celebrity chef Giada De Laurentiis' first Las Vegas outpost and serving as home to the new Drai's Beach Club - Nightclub featuring a one-of-a-kind rooftop pool. The Quad occupies a critically important space at the entrance to The LINQ development. The resort stands to generate increased hotel, hospitality and gaming revenue as a result of the planned upgrades. Bally's Las Vegas' prominent Strip locale is made even more desirable with the enhancements currently underway, including the recently completed renovation of the Jubilee Tower and the addition of Caesars Entertainment's Grand Bazaar retail center outside of the hotel. Harrah's New Orleans is a key asset that exemplifies Caesars Entertainment's city-integrated resort model in a compelling destination area.The purchase terms were negotiated and recommended by special committees comprised of independent members of the boards of directors of Caesars Entertainment and CAC. Lazard served as financial advisor to the special committee of CAC and Skadden, Arps, Slate, Meagher & Flom LLP served as the committee's legal counsel.