Amid rumors of its sale to a real estate investment trust, the Isle of Capri Casinos, Inc. announced Thursday (7/10) a consolidation of top management positions to cut corporate expenses by $2.5 million annually.
However, the news was not welcomed by investors, as the Isle stock price dropped more than 14 percent today (7/11) declining to $8.55 a share in early trading. Volume was more than five times the average number of stock transactions.
The management changes included the elimination of the executive chairman of the board of directors position, and the departure of the Isle's Chief Financial Officer Dale Black "to pursue other interests."
Current vice chairman of the board, Robert Goldstein, will assume the position of chairman of the board of directors, and current Chief Strategic Officer Eric Hausler was named to replace Black as CFO of the regional gambling firm, which operates three Iowa casinos including Bettendorf's Isle of Capri riverboat casino.
Jim Perry, who had served as executive chairman of the board since 2011, will remain on the company's board of directors. The company's news release also said several other senior positions in the Isle's St. Louis corporate office were eliminated, but did not specific which positions were cut.
The Isle has been rumored to be in talks with Gaming and Leisure Properties, Inc. (GLPI) about a possible sale of its operation. The speculation had boosted the company's stock price to a 52-week high of $10.73 a share earlier this month. GLPI is a Real Estate Investment Trust (REIT), formed by a spin-off of assets of Penn National Gaming, Inc., of Wyomissing, PA.
The Isle recently obtained approval of the Bettendorf City Council to move from its riverboat – permanently moored on the riverfront – to a new 70,000-square-foot building to be constructed between its two riverfront hotels. No value has been placed on the new land-based facility, but concept drawings provided by the city council show a plain one-story structure with little of the glitz or amenities of a competing gambling facility planned by developer Dan Kehl for a new land-based casino at the intersection of Interstate 74 and Interstate 80 in Davenport.
Any Bettendorf gambling facility, on the river or on land, will have to contend with years of road and bridge construction issues related to the new Interstate 74 Bridge between Bettendorf and Moline.
