Phil Ruffin Wants to Buy Caesars Vegas Strip Casinos

Phil Ruffin Caesars Vegas Strip Casinos

Phil Ruffin wants to buy casinos with annual revenues in the $200 million to $300 million range.

Treasure Island owner Phil Ruffin expressed interest in acquiring Caesars Entertainment casinos on the Las Vegas Strip. Ruffin’s comments come at a time when major Caesars investor Carl Icahn wants the company to either sell itself or divest itself of properties.

Phil Ruffin said he would be interested in buying any Caesars Entertainment casinos for the right price. He emphasized a desire to buy Las Vegas Strip resorts, though.

When asked about his interesting, Ruffin said the Vegas Strip casinos have “great locations and [Treasure Island] would have strong intrerest.”

Phil Ruffin’s reputation for buying and selling Vegas properties proceeds him. The Colorado developer bought the New Frontier Hotel for $165 million in 1997, then sold it for $1.2 billion in 2007. The return on investment was impressive, but the decision to sell before the real estate market tanked was more impressive.

Phil Ruffin’s Famous Good Timing

The sale of New Frontier Hotel left Phil Ruffin as one of the few executives on the Las Vegas Strip with cash when the global recession hit. He used the cash wisely, buying Treasure Island from MGM Resorts International.

The Treasure Island purchase cost Phil Ruffin $775 million in late 2008, but it’s paid off handsomely in the years since. The acquistion also saved MGM Resorts from bankruptcy.

Phil Ruffin Discusses Vegas Strip Casinos

The owner of Treasure Island said he can pay $1 billion in cash for a casino, but he could raise more through in debt for the right deal. Phil Ruffin said he was interested in properties with an annual cash flow in the $200 million to $300 million range.

Ruffin said that he’s willing to pay 6 times the annual cash flow for a resort.

How Much Are Caesars Casinos Worth?

Barry Jonas, an analyst for SunTrust Robinson Humphrey, said Ruffin’s numbers likely won’t sway Caesars Entertainment. Jonas said that Caesars’ Vegas Strip properties are worth at least 10 times their annual cash flow.

If Caesars Entertainment plans to sell, it has a lot of potential assets. Caesars owns over 50 casinos on a total of 4 different continents. The company owns Caesars Palace, of course, but it also owns the Harrah’s, Bally’s, and Horseshoe casino brands.

Besides Caesars Palace, the company owns Vegas Strip casinos like The Linq, Paris Las Vegas, The Flamingo, The Cromwell Las Vegas, and Planet Hollywood. It also owns the Rio All-Suite Hotel, an off-the-Strip casino which hosts the World Series of Poker.

Tilman Fertitta Interest in Caesars

Phil Ruffin likely faces stiff competition. Tilman Fertitta, the owner of the Golden Nugget Las Vegas, said late last year he was interested in a merger with Caesars Entertainment.

Fertitta owns vast resources to make such a deal. The Houston based dining and leisure executive owns the Landry’s restaurant empire and the Houston Rockets.

Eldorado Resorts

Eldorado Resorts, a North Nevada gaming company, shares an interesting in buying Caesars or its properties. In fact, recent news stories suggests Caesars board granted Eldorado Resorts access to their financial details. That’s a sign of significant interest.

The Reno-based Eldorado Resorts has a recent history of dealing with Carl Icahn. Last year, the company bought Tropicana Entertainment from Icahn.

Carl Icahn Control over Caesars Entertainment

Carl Icahn isn’t the only major Caesars investor interested in a buyout or selloff. Canyon Partners, which owns more Caesars shares than anyone, signaled an interest in a buyout.

So did Oppenheimer Funds, which owns 6% of Caesars.

Icahn appears to be driving the bus, though. Recently, Caesars Entertainment named former Tropicana Atlantic City president Tony Rodio as the new chief executive. Given the fact Rodio worked for Carl Icahn for 7 years during Tropicana Atlantic City’s turnaround, the move signals Icahn’s control of Caesars’ future.