Eldorado buys Caesars casino for US$17b
Eldorado Resorts will buy Caesars in a cash-and-stock deal valued at US$17.3 billion, creating a casino giant.
The acquisition on Monday puts about 60 casinos and resorts in 16 states under a single name, one of the biggest gambling and entertainment ventures in the United States.
“Together, we will have an extremely powerful suite of iconic gaming and entertainment brands, as well as valuable strategic alliances with industry leaders in sports betting and online gaming,” Eldorado CEO Tom Reeg said in a prepared statement.
The company, which will be called Caesars, will be led by Reeg, along with Eldorado Chairman Gary Carano. It will be based in Reno Nevada, where Eldorado is based, with a “significant corporate presence” in Las Vegas, where Caesars is based.
Eldorado will pay US$8.40 per share in cash and 0.0899 shares of Eldorado stock for each Caesars share, or US$12.75 per share. The transaction values Caesars at about US$8.6 billion, and Eldorado will pick up about US$8.8 billion of the casino’s debt.
Shareholders of Eldorado Resorts Inc will hold about 51 per cent of the company’s outstanding stock, with Caesars Entertainment Corp shareholders holding the remaining 49 per cent.
Earlier this year, billionaire Carl Icahn revealed an enormous stake in Caesars and pushed for fundamental changes at the company. Caesars, which operates more than 35 casinos in the United States, emerged from bankruptcy protection in late 2017, but it’s been struggling since.
Casinos have seen a tremendous uptick in revenue, however, with the broad legalisation of sports betting.
Eldorado said Monday that it also reached a real estate agreement with VICI Properties Inc in which VICI will acquire the real estate associated with Harrah’s Resort Atlantic City, Harrah’s Laughlin Hotel & Casino, and Harrah’s New Orleans Hotel & Casino for approximately US$1.8 billion. Other terms of the deal include VICI being given right of first refusals for whole asset sale or sale-leaseback transactions on two Las Vegas Strip properties and the Horseshoe Casino Baltimore.
The Eldorado-Caesars deal is targeted to close in the first half of next year if approved by gaming regulators and shareholders.