A few weeks ago, Caesars Entertainment placed its largest operating unit, the bankrupt Caesars Entertainment Operating Company (COE), up for sale. So far, no one is rushing to buy it, even though the package of assets up for sale consists of 38 casino properties—including the famous Caesars Palace in Las Vegas.
However, Reuters reported last week that buyers are staying away not because of what is included in the package for sale, but what is not included—ownership and control of the highly regarded Total Rewards national loyalty program and its database of 45 million gamblers.
“It’s difficult to imagine a third party coming along and bidding for the assets without Total Rewards,” Fitch Ratings analyst Alex Bumazhny told Reuters. “And the fact that the company is still in a complex, litigious bankruptcy could complicate matters.”
The bankruptcy process is mired in litigation from junior-level creditors as CEOC continues to negotiate with bondholders to gain acceptance of a restructuring plan that would shave $10 billion off the unit’s $18 billion in debt.
The proposed sale has reportedly angered junior-level creditors, whose support is vital to Caesars’ restructuring plan being approved by U.S. Bankruptcy Judge A. Benjamin Goldgar. The judge recently granted CEOC a four-month extension to the deadline for submitting its final restructuring plan. Caesars has until March 15 to convince enough creditors to support the plan.