Isle of Capri Casinos may have answered questions of whether or not the regional casino operator was for sale.
On Thursday 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 expected to slice corporate expenses by roughly $2.5 million a year, the company said in a statement.
The changes came as speculation grew on the casino company’s future.
Reports surfaced a week ago that Isle of Capri, which has 15 casinos and racetracks in seven states, was in talks to be acquired by Gaming and Leisure Properties Inc., a real estate investment trust controlled by rival Penn National Gaming. Reuters placed an enterprise value of $1.29 billion on Isle of Capri.
The management shake-up may have put the merger speculation to rest.
Kim Noland, director of high yield research at Gimme Credit, an independent research service, told investors the changes “make an imminent sale look less likely.”
Macquarie Securities gaming analyst Chad Beynon speculated the bids for Isle of Capri may have been lower than anticipated by the Goldstein family, which owns 40 percent of the company’s outstanding shares.
Robert Goldstein, who has been vice chairman, was been named non-executive chairman. Jim Perry, who had been executive chairman, will continue to serve as a board member.
As for day-to-day operations, Chief Strategic Officer Eric Hausler, whose position was eliminated, was named chief financial officer, replacing Dale Black, who left the company to “pursue other interests.”
Hausler is former gaming analyst with Bear Stearns and Susquehanna and held an executive level position at Trump Resorts before joining Isle in 2009.
“While the promotion of Eric Hausler will come as a surprise to investors, he is well known amongst the Wall Street community given his sell-side experience,” Beynon said.
In the company’s most recent conference call, Isle of Capri said it was looking to save $12 million 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.
The company did not address the sales rumors.
Contact reporter Howard Stutz at firstname.lastname@example.org or 702-477-3871. Follow @howardstutz on Twitter.