Caesars Deal with Eldorado Goes Ahead; Finalization in June

According to the CNBC report, a long-anticipated transaction between Eldorado Resorts and Caesars Entertainment is moving forward despite some delays. The merger is still waiting for approvals from Indiana, New Jersey, and Nevada regulatory bodies. Additionally, the Federal Trade Commission should grant its approval to the same deal.

Commenting on the present state of things, Nevada Gaming Commission Chair Tony Alamo said:

“The board is still investigating. The merger is going like any other merger. It’s just going through the process, which includes a normal investigation.”

What Was Planned

Despite continuous efforts to see the conclusion of the deal by mid-April, both operators will have to wait for the end of June to complete all opened requests regarding the merger. Both of them are in a good state and have solid liquidity to face financial challenges.

Speaking in the numbers, Ceasers has over $3 billion in its . It has recently received a $460 million after selling the Rio property in Las Vegas. On the other side, the completion of the sale of Missouri venues to Twin River, will see Eldorado with the total sum of $850 million on its balance.

At the same time, Eldorado is paying an increasing fee of $2.3 million, which will be paid to Ceasar’s shareholders upon closure of the deal. If the deal sees the light in June, the fee will amount to $17.5 billion, making an insignificant increase regarding the extent of the deal and advantages for both operators.

Other Concerns

Two operators have also agreed to close the merger under the same financial conditions, giving that any change would result in shareholder vote and new financing plans.

Official source reported:

“The deal was constructed with a balance sheet to survive a crisis, with ample liquidity and no debt maturities until 2024.”

The present tax payroll benefit provided by federal Authorities could enhance the cash flow of the newly-established company by several millions of dollars.

The global pandemic crisis comes with Eldorado’s commitment to reimburse its employees until April 10. Caesars, on the other hand, has released many employees but the exact numbers haven’t been unveiled. According to Reno Gazette-Journal claims, 3,200 Caesars workers at Las Vegas venues were sent home right before Nevada’s governor ordered the shutdown of gambling properties.

It is still to be seen how long the casinos will remain closed and what would be the tempo of recovery. Land-based casinos will certainly show the same level of demand compared to pre-pandemic times.

Tony Alamo concluded:

“The gaming industry won’t turn back on like a faucet with water. Once they open, it will be the economic drivers and the psychology of this country that’s going to restart the gaming industry, and that timeline nobody knows.”

Source:

“Caesars merger with Eldorado reportedly moving forward, expected to close in June”, yogonet.com, April 1, 2020.