Supplier News
US – Is Isle of Capri for sale?
By Lewis - 25 July 2014
US operators without the international benefits afforded by Asian market operations, Boyd Gaming, Caesars, Penn and Isle of Capri, are continuing to feel the pinch from national market pressures. While Las Vegas Sands’ last quarter revenues were 85 per cent non-domestic, national operators relying solely on State revenues from the slowly recovering Las Vegas and tanking Atlantic City markets are the source of constant rumour right now.
Speculation has been rife in the US for several months that Isle of Capri is for sale. However, last week the St. Louis-based company announced a management shake-up at the corporate level, eliminating the executive chairman role with the board of directors and the chief strategic officer position. Isle of Capri also eliminated several other senior positions in the corporate office.
The moves are designed to cut corporate expenses by roughly $2.5m a year, the company said in a statement, which has split analysts views, with either Isle of Capri looking to forge a new path with its restructured team, or it’s tidying up its books in further preparation for a prospective buyer.
Isle of Capri currently operates 15 casinos and racetracks in seven states worth approximately US$1.2bn, and has been in talks to be acquired by Gaming and Leisure Properties Inc., a real estate investment trust controlled by rival Penn National Gaming.
However, the management shake-up may have put the merger speculation to rest as it makes an imminent sale much less likely. Analysts have also speculated that the recent bids for Isle of Capri may have been lower than anticipated by the Goldstein family, which owns 40 per cent of the company’s outstanding shares.
In the company’s most recent conference call, Isle of Capri said it was looking to save $12m annually in expenses. “Through our ongoing profit improvement program, we continue to streamline our operations and look for more efficient ways to operate our business,” Isle of Capri CEO Virginia McDowell said in a statement.
Whatever the speculation as to the ownership of Isle of Capri, the near future is likely to be very tough for the US’ traditional domestic casino operators. Without Asian profit-centres or new domestic state licences, the returns are continuing to diminish for these household names.
