Carl Icahn Comments on Historic Caesars/Eldorado Merger

Following the recent historic event, in which Caesars Entertainment merged with Eldorado Resorts, American businessman and founder of Icahn Enterprises, weighed in with the following words:

“We are pleased by the announcement that Eldorado Resorts, Inc. will merge with Caesars Entertainment, at a price of $13.01 per share ($8.40 in cash and $4.61 of Eldorado stock (based on Eldorado’s closing price on June 21, 2019)). This merger is the quintessential example of how an activist shareholder, working collaboratively with the Board, can greatly enhance value for all stockholders. The deal price represents a of 51% over Caesar’s trading price on the day before our representatives ed the Caesars Board on March 1, 2019.”

Icahn also said that he criticized the Caesars board when he took a major position several months prior and that he now praises the board of directors for acting responsibly and decisively in negotiating and approving this transformational transaction, which he rarely likes to do.

He also added that Caesars and Eldorado will be America’s preeminent gaming company. He stated that it is rare to see a merger where, due to their great synergies, “one plus one equals five.” The billionaire businessman is looking forward to seeing their investment prosper, adding:

“Unfortunately, there are far too many boards that unlike Caesars, believe corporations are more like feudal systems, than democracies; that stockholders are the peasants who represent a necessary evil that must be tolerated, possibly patronized, but certainly ignored. Much like the feudal barons, they hire mercenaries (lawyers and investment bankers) to deal with these peasants (stockholders), if they become too unruly. The recent Occidental Petroleum fiasco is a great example of how CEOs and boards will go to great lengths, including “betting the company” to serve their own agendas. If their bet is successful, they and possibly their shareholders win, but if it is unsuccessful, only the shareholders lose. Too many boards like Occidental’s believe they are unable and cannot be removed, and therefore can do almost anything they please. This attitude is a major threat to the value of America’s companies, the stockholders of which are many middle Americans who have more of their savings invested in stocks than ever before.”

Event of the Year

It is worth mentioning that this merger/acquisition is the event of the year in the iGaming Industry. The total value of the purchase is estimated to be $17.3 billion.

The transaction is expected to be finalized during the first half of 2020. The CEO of this new iGaming conglomerate is Tom Reeg, who confirmed that they will become the largest owner and operator of US gaming assets.

“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. The combined entity will serve customers in essentially every major US gaming market, and will marry best-of-breed practices from both entities to ensure high levels of customer satisfaction and significant shareholder returns,” Reeg said.

After the deal was confirmed, the CEO of Caesars said that he is looking forward to collaborating with Eldorado in bringing their companies together. He also said that he is familiar with Eldorado and its management and believes that the combination of accomplishments and best-in-class operating practices of the two companies will be the stepping stones of their success.

Source:

“Carl Icahn’s Statement Regarding Caesars and Eldorado Merger”, George Miller, europeangaming.eu, June 26, 2019.