Caesars to Sell Southern Indiana Operation for $250M

Caesars Entertainment Inc. announced today that it will sell its Southern Indiana operation to Eastern Band of Cherokee Indians (EBCI) for $250 million. Once the deal has been completed, EBCI will then enter into a new annual lease agreement with property owner VICI Properties Inc. for $32.5 million per annum.

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EBCI will continue to use the Caesars (CZR) brand and Rewards loyalty program at Caesars Southern Indiana as agreed by both parties after the transaction has been completed.

Richard Sneed, Principal Chief Eastern Band of Cherokee Indians, said in a press release, “The purchase of Caesars Southern Indiana operating company marks the beginning of an exciting new future for the Eastern Band of Cherokee Indians.” He added, “We are pleased to build upon our long-standing partnership with Caesars as we look to advance our interests in commercial gaming in the coming years.”

Tom Reeg, CEO of Caesars Entertainment, Inc., was equally complementary of EBCI, stating that since their partnership began in 1996, Caesars has admired the growth and success of EBCI’s properties, and they look forward to strengthening their relationship in the future. (See CZR stock analysis on TipRanks)

Cowen analyst Lance Vitanza reiterated his Buy rating on the stock three days ago and raised his price target from $52 to $82 (7% upside potential). Vitanza sees the proposed acquisition of William Hill’s US assets as a lucrative opportunity to capture the growing legalized sports betting and iGaming market, which he values at $20 per share.

Consensus among analysts is a Moderate Buy based on 8 Buys and 3 Holds. The average price target of $78.45 implies upside potential of around 3% over the next 12 months.

Caesars shares have gained around 27% in value since the beginning of the year.