Caesars Interactive Entertainment (CIE), the division that handles the online casino and games for Caesars, is in talks with Giant Interactive Group Inc. over a possible sale. The gaming company is being valued at $4.2 billion by the Chinese gaming company and the success of the negotiation will be determined this week as both groups meet. With a foothold in the Chinese and worldwide market, Giant was granted a short exclusivity period last week.
Bankrupt Caesars Continues to Profit
This deal comes as a hard blow for the current creditors looking to get compensated for their previous investments in the company. The bankruptcy claim by Caesars is at $18 billion, and in efforts to salvage this situation they sold off several of their assets, one of them being CIE. Now that this same company is more than likely to be sold for $4.2 billion, their deals are coming under a lot of scrutiny by the creditors.
This has not stopped the money train, though, as the deal could be finalized by next week. Giant is an enormous game developer that develops and operates multiplayer games such as MMO role-playing games, making their interest in the casino company’s online platform for the purposes of social gaming.
What All the Fuss is About
Currently, the CIE owns several different assets including the World Series of Poker, as well as operating real-money online casinos in Nevada and New Jersey. This has given them a revenue of $785.5 million in 2015, representing a 30.6% increase over 2014. With their popularity, it has drawn the attention of many other players, like Hasbro Inc. and South Korean mobile game company Netmarble Games. They had bid in a recent auction for the company a few weeks prior, but their intentions of buying the company have not been released to the public.
With the creditors on their heels, this sale would be beneficial to them. Although a big portion of the money could go to first lien banks and lenders, the junior creditors would still have to fight for their portion. This is a big step for Caesars, as the bankruptcy dispute has been going on for a long time.