SOLD! Eldorado Resorts Acquires Caesars’ Shares for Total of $17.3bn

Caesars Entertainment Corporation and Eldorado Resorts have gone live with the announcement regarding a definitive merger agreement. The total value of the grandest acquisition of all outstanding shares in Caesars was…

… around $17.3bn, breaking down to $7.2bn in cash, and approximately 77m Eldorado common shares. In addition to this, the operator assumed Caesars’ net debt. The alignment is expected to make them the new market leader in the US gambling sector.

Powerful Alliance

Eldorado’s chief executive, Tom Reeg, believes that the combined entities will bring best-of-breed practices from both corporations, which should result in the highest level of consumer satisfaction. As he pointed out:

“Eldorado’s combination with Caesars will create the largest owner and operator of US gaming assets and is a strategically, financially and operationally compelling opportunity that brings immediate and long-term value to stakeholders of both companies. 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.”

Future Plans and Expectations

Following the deal’s completion, Eldorado expects to achieve around $500m in synergies. Upon closing, Eldorado shareholders will have 51% of the combined entity’s outstanding shares. A new, 11-member board will be established, with six directors coming from Eldorado’s board…

…and five from Caesars. The new business will operate around 60 casino resorts and gaming facilities across 16 states. Those will continue to operate and trade on the Nasdaq Global Select Market under Caesars’ name.

Excellent Strategic Collaboration

Caesars chief executive, Tony Rodio, is positive that ing forces will make the new Caesars well-positioned to compete in the dynamic industry. As he added, the incorporation of Caesars Rewards has produced strong results at the recently acquired Centaur properties. He declared as follows:

“We believe this combination will build on the accomplishments and best-in-class operating practices of both companies. I’m familiar with Eldorado and its management team, having worked with them on a previous transaction, and I look forward to collaborating with them to bring our companies together.

Agreement with VICI Properties

As a sort of prelude to the grand merger, Eldorado struck a $3.2bn master transaction agreement with VICI Properties, the real estate investment trust spun off from Caesars in 2017. Through the transaction, 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 $1.8bn. These facilities will be added to an existing master lease, with the Eldorado-Caesars business paying an annual rent of $154m for the real estate.

The transactions have been unanimously approved by the boards of Eldorado, Caesars, and VICI, with the deal expected to be closed in the first half of 2020. Commenting on the occasion, VICI CEO, Ed Pitoniak, declared as follows:

“VICI is honored and excited to be integrally involved with Eldorado in this transformative transaction. As a REIT, we seek to partner with operators who have the most powerful, valuable and enduring relationships with the end s of our real estate. Under Tom Reeg’s leadership and front-line focus, the combination of Eldorado and Caesars will yield the most compelling guest experiences and network effect in American gaming.”

Source:

“Eldorado To Combine With Caesars Creating The Largest Owner and Operator U.S. Gaming Assets”, ir.eldoradoresorts.com, June 24, 2019.