One pig, slightly perfumed; Loveman’s fire sale

Having waited too long and spent too much to ever get around to his long-rumored teardown of the Imperial Palace, the CEO/CFO/COB and prexy of Caesars Entertainment, one Gary Loveman, now finds himself perfuming a pig. Despite having more brand names under the Caesars umbrella than you could shake a Total Rewards card at, Loveman is ditching the lot of them in favor of — wait for it — The Quad. That’s not a casino … that’s where you hung out in college when the weather was clement. The design is even more underwhelming than the new name:

Yup, it’s the same old Imperial Palace, with a few doodads and curtain walls up front that fail to mask the tiki-tacky design, a lingering tribute to the Axis Powers from the late, unlamented Ralph Engelstad. The Hitler Palace’s casino floor will be expanded by 15,000 feet. Entrance to “The Quad” will be reoriented to the northern end, not that its Strip frontage was ever any great shakes. Sparing every expense, in classic Loveman fashion, the “resort” will remain in operation throughout the makeover. After all, there’s nothing Vegas customers enjoy quite so much as staying in a construction site … and, quite frankly, Caesars is in such ruinous financial estate that Loveman dare not take the IP offline. He paid $370 million for the place seven years ago and I wonder if, in inflation-adjusted dollars, he could get more than a fraction of that amount now.

While we’re on the subject of Capt. Loveman’s sinking ship, Howard Stutz takes extensive exception with the notion of Caesars Interactive being spun off for quick cash. However, he doesn’t rule out an IPO of the unit, which includes the World Series of Poker, among many other assets. You can be damn sure that whatever Loveman, David Bonderman and Leon Black do, it’ll be structured so that they get the gold mine and creditors are left with the shaft, mainly in the form of Caesars’ increasingly degenerate physical inventory. Loveman’s majority partner in Ohio and Maryland, entrepreneur Dan Gilbert (above) must think Caesars Interactive is a heckuva deal, having paid $4,943/share for an undisclosed percentage of the subsidiary. He’s got first dibs on an additional tranche, at $6,115/share. That’d be a sweet, back-door deal for Caesars, save that $80 million isn’t a drop in its sea of troubles.

Likening Loveman to a homeowner who’s selling furniture to pay down the principal on his underwater mortgage, Stutz reveals that Caesars has given up on Macao and is trying to sell its $578 million lemon, a golf course better known as “Loveman’s Folly.” Lotsa luck with that, chum. More worrisome still, the company’s entire Iowa and Mississippi holdings may be up for grabs. In return for the unilateral surrender of vast Mid-South territory and six wholly owned properties, what would Caesars get? Minority stakes in a Baltimore casino, a possible — and expensive — Boston racino and maybe, just maybe, another racino in Florida. At the moment, Caesars would be entirely on the hook for the latter: a $500 million tab. Had Loveman not hogged as many properties as possible in the way of the Park Place Entertainment takeover and ensuing LBO, he’d not be holding a rummage sale today.

One man’s trash is another man’s stash of gold bullion. A Carson City recluse was doing so well living off his investment that he didn’t need to tap the $7 million worth of gold he had lying around the house … alongside his rotting corpse. I’d hate to pay the “inheritance tax” on that windfall.