Caesars sheds NeoGames interests in $28.3m share sale
US casino operator boosts balance sheet with sale of former William Hill business
Caesars Entertainment has shed the last of its remaining stake in former William Hill subsidiary NeoGames Limited, netting proceeds of $28.3m.
According to a Securities and Exchange Commission (SEC) filing, the company instigated a block sale of its 2,151,310 shares in NeoGames at a price of $13.19 per share.
The share sale ends Caesars’ involvement with the internet lottery company, which became a Caesars subsidiary following its $3.74bn acquisition of former owner William Hill in April 2021.
At the time, Caesars gained a 24.5% stake in the NeoGames business, amounting to 6.12 million shares and a position worth an estimated $258.44m.
However, Caesars has made no secret of its desire to shed the business, which operates in a sector where Caesars has no other subsidiary businesses or interests.
NeoGames stock price has fluctuated wildly since the Caesars takeover, rising from a post-acquisition price of $49.09 per share in April 2021 to an August high of $71.98 per share.
In September of 2021, a portfolio of investors including Caesars triggered plans to sell 3.45 million shares in NeoGames, trades which included the sale of 518,601 Caesars-owned shares in the business.
The deal reduced Caesars’ stake in NeoGames to 2.54 million shares, with subsequent transactions reducing this amount even further.
Since then, NeoGames stock has plummeted in value, reducing to a March 18 price of just $14.17 per share, representing a drop of more than 70% when compared to its pre-acquisition value.
Caesars has not confirmed what it plans to do with the proceeds of the sale, however, the casino operator has aggregate principal debts amounting to $14.3bn, debts which could be reduced by this sale.
Indeed, during the firm’s Q3 2021 earnings call, CEO Tom Reeg highlighted 2022 as a year of “massive cash generation” for Caesars as it looks to reduce its negative cash flow position.
Caesars’ coffers were boosted in November with the sale of the William Hill International business to 888 for $3bn, a deal which is set to complete in Q2 2022.